Some help with P800 tax calculation

alfiesmum

Hello everyone. Hope this question is in the right place. I've received a P800 tax calculation this morning. I agree with all figures etc, and have underpaid tax last year. For the amount of £520.
The accompanying notes say that "if your tax calculation says that we will include any tax you owe in your tax code, we will collect the tax in equal installments". It goes on to say "If your P800 Tax Calculation does not say that HMRC will include any underpaid tax in your tax code we will write to you about how to pay". And then they send you a payslip for the whole amount.

My question is where on the P800 tax calculation would it mention repayment through tax code next tax year? I cannot see it anywhere on the P800. But the amount owed is way below the £3000 that their website says they can't collect through your tax code.

Sorry if this is confusing hopefully it'll make sense to someone! Thought I'd try on here, as I'm still on hold to tax helpline after 42 minutes, so far.

Nicola_Ed

Hi

Is your question about a tax refund or an underpayment? A refund is paid by cheque, not by amending your tax code in a later year. If you are referring to an underpayment, a call to HMRC should clarify when the amount is due.

alfiesmum

Hi Nicola,

The question was about underpayment of £520. The accompanying notes say that they will state on the P800 how the money will be recouped by them. But it doesn't say it anywhere that I can see. So was wondering if anyone could tell me where on the form the repayment method is stated.

I have tried a couple of times to ring HMRC. Once was on hold for 57 mins, and got cut off. Next time was only 37 mins before I was cut off. Haven't got the time to try again today. Not to worry, if they want their money, they'll ask I suppose!

I appreciate your reply Nicola, thanks. x

System

alfiesmum wrote: »

Hi Nicola,

The question was about underpayment of £520. The accompanying notes say that they will state on the P800 how the money will be recouped by them. But it doesn't say it anywhere that I can see. So was wondering if anyone could tell me where on the form the repayment method is stated.

I have tried a couple of times to ring HMRC. Once was on hold for 57 mins, and got cut off. Next time was only 37 mins before I was cut off. Haven't got the time to try again today. Not to worry, if they want their money, they'll ask I suppose!

I appreciate your reply Nicola, thanks. x

It's been a while since I've seen a P800 but I think it used to be on page 1. The covering letter part rather than the page that's got the calculation on it.

They'll usually collect the tax through your code. The main exceptions would be

1) underpayments over £3000 ( as you mention)
2) you don't have enough PAYE income to collect the underpayment eg you had an income of £8000 which would be below your tax-free allowance.
3) your normal tax liability would double by including the underpayment in your code.

back_against_the_wall

Why are you underpaid by £520.00 in the first place? This is a substantial figure and just should not arise if your PAYE code was correct. It is often difficult on receipt of a tax calculation to find where exactly on the form it says how any underpayment is going to be collected. Mostly HMRC will try to collect an underpayment through adjustments to your tax code for later years. There should be an accompanying letter with the P800 explaining how underpayments are collected. What this boils down to is that if it has not been specifically stated somewhere in the notes to the P800 that the underpayment will be collected through your tax code, this means they are going to try to make you pay the underpayment by other means, like a direct debit arrangement. It usually says somewhere in the notes that you will be contacted at some point before the start of the next tax year, ie before 5 April next year, to agree some means by which the underpayment can be paid in full by direct payment rather than through your tax code. Another tactic by HMRC is to threaten to collect the underpayment through the Self Assessment system if they cannot get an offer from you to pay up front. This lets them frighten people with issues of penalties for failing to complete SA returns and punitive interest rates.
It is far from clear that HMRC have the legal authority to extend the SA tax system in this way to attempt to collect PAYE underpayments from people who do not fall within the SA system.

alfiesmum

Sincere thanks everyone. This was my daughter asking whilst home last week. I'll pass on all of your advice. Many thanks.
back against the wall, I think the underpayment arose as she started a new job last september, but the old job didn't give her a P45 to hand in , in time. I don't think she's querying that the money is owed, just how to repay. The accompanying letter only says " the reason for the underpayment is set out on the enclosed sheet". Nothing else at all.
Thanks again.