From July HM Revenue & Customs (HMRC) will be sending out P800 Tax Calculations for the tax year 2010-11.
At the end of each tax year, employers and pension providers send details of the salary, pension and tax paid for each individual to HMRC. We use this information to check that the correct amount of tax has been deducted.
Most people have paid the right amount of tax through the Pay As You Earn (PAYE) system and there is nothing more for employers, employees or HMRC to do – so you do not need to be concerned if you do not get a P800 Tax Calculation.
However, some people may pay too much or too little tax during the year. Typical examples are people whose circumstances change during the year (perhaps because they’ve got an additional source of employment or pension income), or who move in and out of work.
We are dealing with people who are due a refund first. This means that people will get their money back more quickly.
We will send P800 Tax Calculations later in the year to people who have paid too little tax.
If you have paid too much tax we will automatically send you a cheque within 14 working days of the date on your P800 Tax Calculation.
If you have paid too little tax, we will usually automatically collect any underpayment through your tax code in 12 monthly instalments over the next tax year, from April 2012. (As long as you have enough PAYE income from a continuing employment or UK based pension).
If paying the amount over a year would cause financial difficulty, we may be able to spread the payments over two or three years. Please contact us on 0845 3000 627 if you want to discuss payment options.
If you make an arrangement with us to pay back the tax that you owe, we will not charge interest on this amount. If you choose not to contact us, we will ask for payment of the full amount on which interest could become due.
If the payment due is £3,000 or more we will contact you about how to pay.
If you think that we should have already collected the tax due in your P800 Tax Calculation because the information had already been provided to us either by yourself or a third party, and we have failed or delayed to use this information, then in some limited circumstances we may agree not to collect it.
If you think this may apply to you then please contact HMRC giving full details using the address on the P800 Tax Calculation or by calling 0845 3000 627.
For more information on tax calculations please visit http://www.hmrc.gov.uk/esc/esc.htm