HM Revenue and Customs (HMRC) is checking around 45 million tax accounts to identify people who have paid too much or too little tax. The tax office has begun issuing P800 tax calculation letters following the end of the 2025/26 tax year, with the annual PAYE reconciliation process due to continue until November.
Letters to people who have overpaid tax are being prioritised and sent first, HMRC has confirmed. Those owed money can claim their refund online through GOV.UK or the HMRC app and should receive payment within five working days, although HMRC will automatically issue a cheque in some cases.
Unclaimed refunds top 730,000
The latest checks follow HMRC's disclosure that more than 730,000 tax refunds went unclaimed last year, with an average value of £855. For most PAYE customers, refunds are no longer automatically issued by cheque, meaning people may need to take action to receive money they are owed.
HMRC is urging people who receive a P800 to read it carefully, check the figures against their own records and follow the instructions contained in the letter. The tax office carries out its PAYE reconciliation after the end of each tax year to verify whether employees have paid the correct amount of Income Tax.
Someone could have paid the wrong amount for several reasons, including starting a new job before receiving their P45 from a previous employer, having more than one job at the same time, or being placed on the wrong tax code.
Expert advice on checking P800 letters
Seb Maley, CEO of tax insurance provider Qdos, said: “HMRC is reviewing the taxes 45 million people and the UK's estimated 700,000 umbrella workers should pay particularly close attention.
“Moving between assignments and PAYE employers means there can be more changes to keep track of. HMRC itself recognises that starting and finishing jobs can result in people paying the wrong amount of tax. So if you work flexibly, don't assume your tax position is automatically correct.
“And crucially, being told you’re owed money by HMRC doesn't always mean it will simply land in your account. Depending on the circumstances, you may still need to actively claim it.
“More than 730,000 refunds went unclaimed last year, averaging £855. If you receive a P800, check the figures carefully, follow HMRC's instructions and make sure you claim anything you're owed.”
How to claim a refund
People can check the HMRC app or their Personal Tax Account to see whether they are due a refund. Those owed money should see a green “Claim” button in the PAYE section of the app or online account, which can be used to request the repayment. HMRC says refunds requested this way are normally paid directly into a bank account within one week.
People who cannot use digital services or would prefer a paper payment can still request a cheque, although this will take longer. They will need the reference number from their P800 tax calculation letter and their National Insurance number.
HMRC has also recently changed the way repayments are made for the majority of employees who submit claims covering more than one tax year. The process for making a multi-year claim has not changed, but once HMRC has processed it, the claimant will receive a P800 Tax Calculation letter and will now need to request the repayment rather than waiting for a cheque to arrive automatically.
They can request the money using the HMRC app or Personal Tax Account. Alternatively, they can use the unique reference number on their P800 and their National Insurance number to request the refund online without signing into Government Gateway. Digital repayments for these claims are normally made by bank transfer within one week.
What happens if you have underpaid tax?
The checks will also identify people who have paid too little Income Tax during the previous tax year. HMRC says outstanding amounts are usually collected automatically through PAYE, with no action required from the taxpayer. The amount can normally be recovered by adjusting a person's tax code so that the outstanding tax is collected from their wages over a period of time.
Anyone receiving a P800 should check that HMRC has used the correct details about their income and tax before paying or claiming anything.
HMRC scams warning
HMRC has also warned people to be alert to scams as millions of tax accounts are checked and refund letters are issued. The tax office says it will never ask someone to claim a refund by replying to a text message or email. Anyone receiving an unexpected message claiming to offer a P800 refund should not use the links or provide personal or banking information.
