HM Revenue & Customs (HMRC) has confirmed that approximately 700,000 UK residents could be owed an average of £473 each in Income Tax refunds. The department has sent P800 tax calculation notices to hundreds of thousands of individuals who paid too much tax through the Pay As You Earn (PAYE) system during the last tax year.
What is a P800 tax calculation notice?
A P800 is a letter issued by HMRC when it reviews your tax at the end of the tax year and finds that you paid either too much or too little Income Tax. This typically happens if you have multiple income sources, used an incorrect tax code, changed jobs mid-year, or receive State Pension alongside other income. The notice is not a demand or penalty but a summary showing how your tax was calculated based on information from employers, pension providers, and other sources.
Most PAYE taxpayers do not need to file a Self Assessment return, but if HMRC identifies a discrepancy between the tax deducted and the tax actually due, it will issue a P800. If you are owed a refund, you can claim it directly from HMRC.
How to claim your refund
To claim your refund, you can use your personal tax account online, the HMRC app, or contact HMRC directly. You will need either the reference number from your P800 letter or your National Insurance number. The fastest option is online bank transfer, which typically deposits funds into your account within five working days. If you prefer a cheque, be prepared to wait up to six weeks.
HMRC reminded taxpayers on social media: "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."
Expert advice on P800 notices
PHS Chartered Accountants explained: "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."
What if you owe money?
If your P800 shows you owe tax, HMRC will usually adjust your tax code to recover the amount over the next 12 months, starting from the following tax year. This means slightly higher deductions from your pay or pension each month, spreading the repayment evenly.
An HMRC spokesperson said: "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."
If you believe you are owed a refund but have not received a P800, you can check your tax account online or use the HMRC app to see if you have any outstanding refunds. Don't miss out on money that is rightfully yours.
