An estimated 1.2 million people paying tax through Pay As You Earn (PAYE) are receiving unexpected tax bills for the 2010-11 tax year. HM Revenue & Customs (HMRC) is reviewing PAYE records and issuing bills where it believes tax has been underpaid by £50 or more.
The bills, sent on form P800, are based on computer data held by HMRC. However, this data may be incomplete or contain errors. Taxpayers are advised to check the calculation against their own records, including P60, P45, P11D forms, and bank statements.
Individuals should ensure that HMRC has been informed of any payments that reduce tax liability, such as pension contributions or gift aid donations. Allowable expenses, such as mileage allowances for business travel or uniform costs, should also be claimed. Higher personal allowances may apply if you turned 65 or 75 during the tax year.
If you believe the calculation is wrong, contact HMRC on 0845 3000 627 (textphone 0845 302 1408). Keep a record of the call, including the date, time, and name of the person spoken to. If writing, include your National Insurance number, PAYE reference, full name and address, and sign and date the letter.
If HMRC has made a mistake, you may be able to invoke Extra-Statutory Concession A19 (ESC A19) to have the tax written off. If your employer or pension provider made the error, HMRC may pursue them for the tax owed.
