P800 Tax Refund Guide

What is a P800 Tax Refund?

P800 tax calculation is the official name of the letter HMRC sends taxpayers if they realize that you've paid wrong amount of tax. The calculation shows the amount of tax you owe along with the amount you've already paid. If the taxpayers paid too much tax or too little amount of tax, in both the cases they receive p800 from HMRC. HMRC takes action in both the cases. If you haven't paid the tax you owe, they'll take required action to get that from you. On the other hand if you overpaid the amount they'll provide you a tax refund. If the government realizes that you paid too much tax as compared to what should have, in which case, you are lucky, then they will send out a P800 form stating that you paid an extra amount and are entitled to a refund. The form will state the amount that the HMRC owes to you as a refund. You can go ahead and claim this P800 Tax Refund as per what the form states- either online or through a cheque which the HMRC will send out to you.

P800 Calculations

If you have made a Tax Rebate Claim

Once you start requesting for a tax rebate claim, you'll get 4 tax calculations, i.e. 1 for each year you've claimed. If you get more than one calculation, you shouldn't add them together for calculating about the refund of the tax. Each year's result is added automatically in the following year's calculations till the final year.

Note- The final rebate amount will include previous year's amount also. Say for example you made a tax rebate claim for uniform and business mileage. HMRC owed you £100 in the last 4 years i.e. £400.

The result of the P800 calculation are given below:

• For 2013-14 - HMRC owes you £100
• For 2014-15 - HMRC owes you £200 (£100 for current year + £100 of previous year)
• For 2015-16 - HMRC owes you £300 (£100 for current year + £200 of previous years)
• For 2016-17 - HMRC owes you £400 (£100 for current year + £300 of previous years)

The total rebate claim due is £400, which is shown in the final calculation.

P800 Calculation Process

An employer shares details with HMRC regarding the income an employee receives, the amount of tax paid, and any additional perks that an employee receives during a tax year. Using this information, HMRC carries out reconciliation at the end of each tax year. After putting together all of the information received, HMRC works out payable tax amount. If HMRC thinks that the correct amount is not paid, they send out a P800 tax calculation. This calculation shows what HMRC thinks should have been the payable tax. It is imperative to check the P800 tax calculation carefully; HMRC may not have the accurate information they need to calculate the correct amount of tax payable.

• If HMRC think an individual has overpaid tax, they will automatically send a tax refund and the individual will not have to make a claim
• If HMRC think that an individual has NOT paid enough tax, they will write to the individual giving an explanation of how they intend to collect the underpaid tax through the tax code or other means of repaying tax to HMRC

What Could Be The Reasons For Overpayment?

• Began a new job and had an emergency tax code for a while
• Only had a job for part of the tax year
• The employer used a wrong tax code
• Working on multiple jobs at the same time
• Income earned during holidays (for students)
• Stopped working and had no taxable earning for the remainder of the tax year
• Work profile changed from full-time to part-time work

In below cases an individual might overpay income tax on pension income

• pension provider was using an incorrect tax code
• the amount of state pension in the tax code was incorrect
• the taxable income has decreased
• more than one pension (multiple source of PAYE income)
• too much tax was paid on a pension lump sum

If an individual thinks that he / she has overpaid tax through PAYE in a tax year, it is important to inform the HMRC before the end of the tax year. It is possible to inform HMRC over the telephone. Before contacting HMRC over the telephone, the following information should be kept handy:

• Personal details such as full name, date of birth, address, and National Insurance (NI) number
• Estimate of earnings and pensions, from each source, for the current tax year
• Details of each employers / pension providers - their PAYE scheme reference number

Post the completion of the online process, the refund should be credited in the bank account within 3-5 working days.

You must note down the below points while making a call:

• Date and time of the phone call
• Name of the adviser with whom you interacted
• Conversation details what was spoken by both the parties

In some special cases, additional information might be required to share for claiming your tax return. In such case HMRC will inform you about the corresponding paper works.

What to do if you Receive a P800?

If you've received a P800, it is advisable to check the figures and calculation used by the HMRC before anything else. In case, there are any discrepancies, you should go ahead and inform the HMRC regarding this. In case the values are all fine, then here is what you need to do:

In Case of Underpayment

This means you paid a smaller amount than you were supposed to in the form of taxes and hence, the adjustments ideally are made in the subsequent year. HMRC will collect the amount due in installments over the next year. This entire thing will happen automatically if you pay the income tax through an employer or pension provider, earn enough income over your personal allowance to cover this amount or if you owe less than £3,000. If HMRC can't cover this amount automatically, then it will write to you informing you about the other payment options.

In Case of Overpayment:

This simply means that you paid a higher amount than you were supposed to pay and hence, you will get the extra amount back in the form of a refund by HMRC. Your P800 form will tell you how you will get this refund. You can either claim it online within 45 days or post that, HMRC will send you a cheque within 60 days of the date on your form. In case your P800 states that you will get the refund through cheque, you don't need to do anything. You'll get your cheque within 14 days of the date on your P800. A point to be noted is that if you are owed tax for more than a year, you'll get a single cheque of the total amount.

What Information Could be there on your P800 Form?

• Your P800 form shows a series of figures and calculations, and it is necessary for you to carefully check all the information that is mentioned in the form to ensure that you are being made the right demand or the right refund. The following details are noteworthy:
• Income: This section shows your total income from wages, pensions, savings interests, state benefits and employee benefits. This income is as calculated by the HMRC and should match with the figures that you calculated and mentioned in your forms- P60, P45, and P11D.
• Deductions: This section mentions any deductions on your taxable income that you do based on the tax reliefs you claim. These deductions will be shown under two categories:

1. Flat Rate Job Expenses which refer to your uniform cleaning allowance
2. Job expenses which refer to mileage allowances or professional subscriptions/fees, etc.

• Allowances: Every individual's tax-free personal allowance and any other allowances that you might have, which are deducted from your income are mentioned under this section.
• Adjustments: Any prior dues, either concerning overpayment or underpayment of tax in the previous years, which have not been claimed yet are mentioned under adjustments. The married couples allowance will also be mentioned under this section.

Total tax paid: This will state the total tax that you paid in the concerned year.

Result: The most important section in a P800 form, this is the section which states the final amount that you will receive as a refund or that you need to pay. It will also include any amount which has already been refunded to you during that year in some form or the other.

You should verify all the above figures very carefully and make sure they're matching with your own calculations and records. If the values match then the next steps will be taken depending on whether you owe HMRC some money or whether HMRC owes you some money.

How to Work-out Tax Refund if you've got 3 or more P800 Forms?

Sometimes, you can end up dealing with a lot of P800 forms. This can happen if you are claiming a refund for different years, in which case, you will have a separate form for each year. It needs to be noted that you can claim a refund only for the last four years, so at one point, you can have a maximum of four forms.

In such a case, you calculate your total tax refund not by adding the individual figures for each year but simply by looking at the final figure of the amount owed to you in the latest year. The figure in the result section of the form shows any refunds that were due to you in the past too and hence, includes calculations from previous years too. Therefore, the final year form should give you your total refund. You should not go adding up the numbers from all years and expect to get a huge refund.

However, it is advisable to keep all the forms safely with you. It just might be possible that you will have to refer to them in case of any discrepancies or miscalculations.

The Process of Getting your P800 Refund

The P800 tax calculation will tell you the ways you could get the refund. The process will tell you whether you can get the refund through online or by cheque.

Claim Your Refund Online

If your P800 tells you to claim your refund online, then within 5 working days you'll receive the money in your UK Bank account. In case you don't claim within 45 days then HMRC will send you a Cheque. You'll get the same within 60 days of the date on your P800.

Log onto the official HMRC website and follow the steps mentioned to request a refund through the Personal Tax Account. To claim online, an individual needs to sign in using the Government Gateway ID. If HMRC's online services are being used for the first time, individuals will be prompted to set up a Government Gateway ID.

If P800 Says You'll Get a Cheque

Your P 800 will tell you once HMRC will send you a cheque. Here you don't require to make a claim. You'll get the cheque within 14 days of the date on your P800. In case you're owed tax from more than one year, then you'll receive a single cheque for the total amount.

What Will you do If You Don't have P800?

If you don't have P800 but still you think you've paid too much tax, then you should contact HMRC for the same. If they agree with your issue then they'll send you P800.

Time limits for claiming P800 Tax Calculation repayments are

• Tax year 2013/14 (year ended 5 April 2014) - you must claim by 5 April 2018
• Tax year 2014/15 (year ended 5 April 2015) - you must claim by 5 April 2019
• Tax year 2015/16 (year ended 5 April 2016) - you must claim by 5 April 2020
• Tax year 2016/17 (year ended 5 April 2017) - you must claim by 5 April 2021
• Tax year 2017/18 (year ended 5 April 2018) - you must claim by 5 April 2022

How To Contact HMRC For P800 Tax Refund?

An individual can also contact HMRC by Phone to request for a refund. HMRC will inform about the paperwork required to process the refund.

Note: If an individual doesn't claim the refund online within 45 days, HMRC will automatically send a Cheque for the full refund.

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.