Thousands of UK taxpayers could be hit with unexpected tax bills due to underpaid Pay As You Earn (PAYE) deductions, HM Revenue & Customs (HMRC) has warned.
The tax authority is urging individuals to check their tax records as soon as possible to avoid potential penalties. Many may be unaware they owe additional tax due to errors in their tax codes or discrepancies in income reporting.
Why You Might Owe More Tax
Common reasons for underpaid tax include:
- Multiple income sources not being properly accounted for
- Changes in employment during the tax year
- Company benefits or expenses not being correctly taxed
- Incorrect tax codes being applied
How to Check If You're Affected
Taxpayers can view their tax records online through their Personal Tax Account on the HMRC website. The system shows:
- Your current tax code
- Income tax estimate
- Any underpaid or overpaid tax
Those who owe money will typically receive a P800 tax calculation letter from HMRC, either by post or through their online account.
What to Do If You Owe Tax
If you discover an underpayment:
- HMRC may collect the debt through your tax code if it's less than £3,000
- Larger amounts may need to be paid directly
- You can set up a payment plan if you're unable to pay in full
Experts recommend checking your tax status regularly rather than waiting for HMRC to contact you, as this can help avoid surprise bills.
