HMRC has confirmed that around 700,000 Brits could be entitled to payments averaging £473. The government department, which is in charge of collecting taxes and paying certain benefits, sent letters to hundreds of thousands of people to inform them they are due a refund.
What is a P800 tax calculation notice?
The P800 tax calculation notice is a letter sent by HMRC to people who pay tax through the Pay As You Earn (PAYE) system. It means HMRC checked your tax at the end of the year and found you paid too much or too little Income Tax. Recipients are able to reclaim overpaid tax directly from the department, with payments averaging £473.
How to claim your refund
Refunds can be claimed through your personal tax account, through the HMRC app, or by contacting the department directly. You may claim your refund using the online bank transfer service or by requesting a cheque online, but you will require either the reference number from your P800 letter or your National Insurance number. The money typically takes around five working days to arrive in your bank account. However, those requesting a cheque from HMRC can expect a wait of up to six weeks.
What accountants say about P800
PHS Chartered Accountants said: "Imagine opening a letter from HMRC only to discover that you've either paid too much tax or owe additional tax. It can be confusing, especially if you've always believed your tax was deducted correctly through PAYE. This is where the P800 tax notice comes in. It helps reconcile the tax you've paid with the amount you should have paid during the tax year."
They added: "A P800 Tax Calculation is a document issued by HM Revenue & Customs (HMRC) when it believes you've paid either too much or too little Income Tax during a tax year. It is not a tax demand or a penalty. Instead, it is a summary showing how your tax has been calculated based on the information HMRC has received from employers, pension providers, and other sources."
"Most people who pay tax through the Pay As You Earn (PAYE) system don't need to complete a Self Assessment tax return. However, if HMRC identifies a difference between the tax deducted and the tax actually due, it may issue a P800."
Why you might receive a P800
According to the accountants, you might receive a P800 if you have multiple sources of income, have used the wrong tax code, changed jobs, or if you receive the State Pension alongside another income. Should the letter indicate that you owe tax, HMRC will typically adjust your tax code to recoup the outstanding amount. This means an increase in tax deductions from your wages, salary, or pension in equal instalments over 12 months, commencing from the start of the subsequent tax year.
HMRC's reminder on unclaimed refunds
HMRC said in a post on X: "Remember getting a letter about a tax refund but didn't do anything about it? Last year, almost 700,000 people didn't claim back the money they're owed. Download the HMRC app to check."
An HMRC spokesperson added: "We wrote to customers this summer to inform them they are due a refund, and need to claim it. Customers can follow the straightforward instructions in the letter, which explain how they can quickly and easily claim it online on GOV.UK or via the HMRC app."
