There are not many things that are more tedious than working out your taxes. The process is long and can mean you might pay the wrong amount. Even if your taxes are automatically deducted from your pay, HMRC can sometimes make mistakes.

Around one in six people believe that they have overpaid tax due to an error they made on their tax return form. You might also have paid the wrong amount of tax if your tax code isn't correct or you've been given a pay rise that HMRC wasn't made aware of.

In these scenarios and other cases of mispaid tax, HMRC will notify you that you have overpaid or underpaid tax. They will issue you a P800 form so that the situation can be corrected.

In this article, we'll break down what a P800 form is, why you might be given a refund and how long it can take HMRC to process it.

What is a P800 Refund?

HMRC need to make sure that everyone is paying the correct amount of tax. If they discover that you have paid too little or too much tax, HMRC will send you a P800 form so that the mistake can be rectified.

P800 forms act as a tax calculation and show the amount of tax that you've paid, as well as your annual salary. They are sent out after the end of the tax year (which runs from 6 April to 5 April annually). However, it can take a good few months for your P800 letter to be sent out.

Continue reading to find out what information a P800 form will contain and how you can collect your refund.

A P800 is a form that is distributed by HMRC. It will show your current financial situation at work, such as your total income, the tax you have paid and any tax-deductible expenses.

The purpose of the form is to notify you of any tax discrepancies, such as over or underpayment. This could be due to a number of scenarios, such as a fault you made when filling out tax returns, an error made by your employer or a mistake made by HMRC.

In the letter, HMRC will tell you how you can reclaim the money you are owed or how to pay the tax that is outstanding.

Aside from accidental or intentional faults in your tax amounts, some lifestyle situations can mean you receive a P800. For example, you might finish one job and start a new one in the same month. In this instance, you will have been paid by both jobs in the same month and this could change the tax you are due to pay.

Another reason that you could be sent a P800 is if you start receiving a pension whilst you're still working. Sometimes pension providers will use the wrong tax code, which will affect how much you pay. Having more than one pension or another source of PAYE income could also cause you to overpay tax if your full income isn't properly calculated.

Those receiving Employment and Support Allowance or Jobseeker’s Allowance can be taxed if the benefits were calculated and paid according to the National Insurance contributions you have previously made.

Your P800 form will tell you the calculated tax amount that you are due in a refund. A list of options will be presented and you will be able to choose how you wish the money to be paid back to you.

Online

You may be able to claim your refund online. HMRC will give you instructions on your P800 form as to how you can do this. If you do not complete the online application within 21 days from the date on your P800, you will be sent a cheque. This will be sent to you six weeks from the date on your form.

If you do complete your online application, you will be sent the refunded money within five working days. The money will appear in your UK bank account following the processed transfer.

By post

Your P800 form may tell you that the refunded money will be paid to you via post. In this instance, you do not have to do anything as the money will be sent to you automatically. The money will be sent to you 14 days after the date listed on your P800 form.

Whether you are owed a refund from one tax year or more, the money will be paid to you via a single cheque.

There's no need to worry if your P800 says that you owe HMRC tax. They will usually collect the money in instalments over the course of the next tax year.

The money will be taken automatically from your pay if you owe less than £3,000, pay Income Tax via a pension provider or your employer or if you earn enough to cover the payment through your Personal Allowance.

If there is a problem with the automatic deduction of the money you owe, HMRC will contact you and give you an alternative solution.

Online

Your P800 will tell you whether you are able to make the tax repayments online. You will need your Government Gateway ID to use HMRC's online services.

By post

Paying by cheque is another method that HMRC may ask you to do. The cheque should be made payable to ‘HM Revenue and Customs only’. Send the payment to HMRC Direct
BX5 5BD.

The cheque will need to be accompanied by a covering letter that includes your personal information, such as your full name and address, National Insurance number and what the payment relates to (such as PAYE). You will also need to state how much you are paying via cheque and which tax year the payment is for.

Allow a few days for the cheque to reach HMRC - it should arrive at HMRC within three days.

In some rare instances, the P800 form may be wrong and tell you that you owe money even if you don't. There are a few steps that you should follow in order to confirm whether the information on the form is correct.

Try to compare the information about your income and tax with other official forms. This could include a recent P60 or bank statements. Check that the correct expenses have been included and calculated before you pay the tax refund.

If you still feel that the P800 contains the wrong information, you need to contact HMRC as soon as possible. Tell them if you think the amounts are wrong or HMRC have failed to consider information that you had given them.

You can query your P800 up to 60 days after the date stated on the form. This can be done either by writing a letter or over the phone.

More information on this matter can be found in the Simple Assessment letter that accompanies your P800 form. You will have been sent a Simple Assessment letter if you owed tax over £3,000, you have to pay tax on a State Pension or you owe tax that cannot be automatically deducted from your following income.

P800 forms are an easy way for HMRC to let you know how much you are owed in a refund if you have overpaid tax. They can also tell you how much money you owe if you have underpaid taxes.

Although you can decide to have the money refunded to you online, you will automatically receive the refund via cheque even if you don't take any action.

It will take you a little while after the end of the tax year before you are sent a P800 form. There's no need to worry as HMRC will issue you with the refund in the following tax year.