Receiving a letter from HMRC saying you have either overpaid or underpaid tax can be confusing, especially when you thought your PAYE tax was already being handled correctly.
If you are employed or receive a pension, HMRC may send you a P800 tax calculation after the end of the tax year. The calculation compares the tax you should have paid with the tax that was actually deducted from your income.
The result may show that you are due a tax refund — or that you have some additional tax to pay.
Understanding your P800 can help you spot mistakes and make sure your tax position is correct.
What is a P800 tax calculation?
A P800 is a tax calculation letter sent by HMRC to certain people who receive income through PAYE.
It can show that you have:
- Paid too much tax and are due a refund
- Paid too little tax and owe additional tax
You will not normally receive a P800 if you complete a Self Assessment tax return for the relevant year. Instead, any adjustment will generally be reflected in your Self Assessment calculation.
HMRC may issue a P800 for several reasons.
For example, you may have:
- Been on the wrong tax code during the tax year
- Left one job and started another during the same tax month
- Started receiving a pension while still working
- Received certain taxable benefits, such as Employment and Support Allowance or Jobseeker’s Allowance
- Had changes in your income or tax deductions during the year
These situations can sometimes result in too much or too little tax being deducted through PAYE.
What does your P800 mean?
The first thing to check is whether HMRC says you have overpaid or underpaid tax.
If you have overpaid, HMRC will explain how your refund will be paid.
If you have underpaid, the letter will explain how HMRC intends to collect the tax.
But don’t stop there.
It is important to read through the figures and make sure the information used by HMRC is correct.
If your P800 says you are due a refund
If HMRC calculates that you have paid too much tax, your P800 should explain how you can receive the refund.
Depending on the circumstances, you may be able to claim the refund online through your GOV.UK tax account, the HMRC app or by contacting HMRC.
If the P800 says that you can claim your refund online, you should follow the instructions provided by HMRC.
Where an online claim is available, HMRC says the refund should normally arrive within 5 working days after the claim is made.
In some cases, HMRC may issue a cheque instead. If your letter says a cheque will be sent, you generally do not need to make a separate claim. HMRC says the cheque will normally arrive within 14 days of the date on the P800 letter.
What if your P800 says you owe tax?
A P800 can also show that you have not paid enough tax during the year.
In some cases, HMRC may collect the amount automatically by changing your tax code.
Where the relevant conditions are met, HMRC can usually adjust your PAYE tax code so that the amount owed is collected from your employment or pension income over 12 equal instalments.
This generally applies where:
- You pay tax through PAYE on employment or pension income
- Your income is high enough for HMRC to collect the amount through your tax code
- The amount owed is less than £3,000
If HMRC cannot collect the tax through your tax code, they will normally contact you with information about how the tax should be paid.
Don’t automatically assume the P800 is correct
One of the biggest mistakes you can make is simply accepting the P800 without checking it.
HMRC’s calculation is based on the income and tax information they hold. If that information is incomplete or incorrect, the calculation may also be wrong.
This can be particularly important if you have more than one source of income.
For example, you may have employment income alongside pension income, savings income or another source of taxable income. The way your allowances and tax bands are allocated can affect the amount of tax you should pay.
Check your allowances and tax bands
If you have multiple sources of income, take a closer look at how your allowances have been allocated.
In some circumstances, errors can occur in the way allowances are applied, including issues involving savings income and the Personal Savings Allowance and savings nil rate band.
Don’t assume that the figure on your P800 must be right simply because it has come from HMRC.
Check the income figures, tax deducted, allowances and other information used in the calculation.
What should you do if your P800 looks wrong?
If something doesn’t look right, contact HMRC and explain what you believe is incorrect.
Have your relevant documents available, such as:
- P60s
- P45s
- Payslips
- Pension statements
- Details of taxable benefits
- Previous tax coding notices
If HMRC agrees that the calculation is wrong, they can issue a revised tax calculation.
If HMRC does not agree, they should explain why they believe the original calculation is correct.
P800 vs Self Assessment: What’s the difference?
It is important not to confuse a P800 with a Self Assessment tax calculation.
A P800 is generally used to reconcile PAYE tax for people who are employed or receive pensions and who are not completing a Self Assessment tax return for that year.
If you are required to complete a Self Assessment tax return, your tax liability is normally calculated through your Self Assessment return instead.
So, if you receive a P800, don’t automatically assume it means you need to complete a Self Assessment return. The two processes are different.
Final thoughts
A P800 letter can be good news if it shows you are due a tax refund, but it can also reveal that you have underpaid tax.
Either way, check the calculation before taking action.
Make sure your income, tax deductions and allowances appear correct, particularly if you changed jobs, received a pension or had more than one source of income during the tax year.
If the numbers don’t make sense, don’t ignore the letter. Contact HMRC or speak to a qualified tax professional who can help you understand your tax position.
A few minutes spent checking your P800 could help you avoid paying the wrong amount of tax or missing a refund you are entitled to.
Disclaimer This article is for general information only and does not constitute personal tax advice. UK tax rules and HMRC procedures can change, and the correct treatment depends on your individual circumstances. For advice about your specific tax position, check the latest GOV.UK guidance or speak to a qualified tax professional.