P800 tax calculation: what it means and how to claim

A P800 is HMRC’s tax calculation letter. It means that by 5 April your PAYE records showed you had paid too much or too little income tax, and it tells you which, by how much and what happens next. Letters go out between June and March of the following tax year, so one can arrive months after the year it covers.

Why you might get one

HMRC gives four reasons on GOV.UK. You were on the wrong tax code, for example because HMRC held the wrong income details. You finished one job, started another and were paid by both in the same month. You started getting a pension from work. Or you received Employment and Support Allowance or Jobseeker’s Allowance.

The first two are the common ones among public sector staff who change employer, for example a nurse moving trusts or a teacher moving schools mid-term. A letter does not mean you did anything wrong. For the background on how the mismatch arises, see claiming a tax refund and underpaid tax.

If the P800 says you are due a refund

The letter states how you get the money. There are two routes.

If it says you can claim online, you can use the online bank transfer service or ask for a cheque. You need the reference number from the letter and your National Insurance number. You can also claim through your personal tax account or the HMRC app if you have a UK bank account, or by contacting HMRC. HMRC says it sends the money within 5 working days if you claim online and within 6 weeks if you ask for a cheque.

If the letter says a cheque is coming, you do not need to claim. It should arrive within 14 days of the date on the letter. If you are owed tax from more than one year, you get one cheque for the whole amount.

If the P800 says you owe tax

HMRC usually collects it by changing your tax code, which raises the tax taken from your pay, normally in equal instalments over 12 months from the start of the following tax year. That happens automatically when you pay tax through an employer or pension provider, your income is high enough above the Personal Allowance to cover the amount, and you owe less than £3,000. If HMRC cannot collect it this way, it writes to explain how you can pay.

You can also pay early, before the next tax year starts, online, by bank transfer or by cheque. Whether to do that depends on your own finances. Anyone who cannot afford the higher deductions should contact HMRC.

Owing more than £3,000 can lead to a Simple Assessment letter instead, which has a payment deadline. People who owe tax on a State Pension, or tax that cannot be taken from income, get one too.

A typical way it happens

Say you leave one job on the 20th of a month and start a new one on the 25th, and both employers pay you in that month. Two payrolls reporting pay for the same month can leave HMRC’s year-end totals out of line with the tax taken. That is the “paid by both in the same month” case on GOV.UK’s list, and it is a common way for a P800 to appear after a move. The calculation is HMRC’s attempt to settle the difference once the year’s records are complete.

Checking the figures

Before you accept a P800, compare it with your own records. Find your pay and tax for the year on your P60 or final payslip (see P45, P60 and P11D) and check the employers and dates it lists. Wrong income details are the usual cause of a wrong calculation.

If the amounts look wrong, contact HMRC and say which amounts you think are incorrect and what they should be. If HMRC agrees, it sends a new calculation. If it does not, it contacts you to explain why. Your tax code may also need correcting so the same problem does not repeat in the new year.

If no letter arrives

You only get a letter if you are employed or get a pension. If you think you paid too much and HMRC has not written, GOV.UK points you to its refund claim service. If you think you owe tax and have not had a letter, contact HMRC.