Tax refund - wrong figure?

CrazyRed

I don't normally frequent this board, but wondered if I could tap into the wisdom here, please?

I received a letter from HMRC this morning (apparently a form 'P800') informing me that I was due a refund of around £900 in overpaid income tax for last year.

This surprised me, as I left work to become a full-time carer (and receive Carer's Allowance - which I understand is taxable) and, according to what I'd worked out earlier this month, I was due a refund of nearer £600 if the income from the CA was taken into account (£2,114 this tax year).

Reading further down the letter, it tells me that a "payable order" has already been sent for the £900-odd.

Now for my question : I'm certain that CA is a taxable benefit, so, in theory, I add together my P45 figure from my ex-employer and the total income to date for CA and that becomes my total 'taxable income' for the year, and then tax is due @ 20% on everything earned over my personal allowance? If so, then that means for sure I'm going to be getting just over £300 tax refund that I am not due. How can I resolve this? I don't want HMRC coming after me later this year and demanding the overpayment back - being on a fixed income this would be difficult to budget for and could cause us issues.

Any advice, please, or is HMRC correct and, actually, I've had a touch and there's £900-odd winging it's way to me?

Thanks in advance

Dazed_and_confused

Did you claim a refund or has this come out of the blue?

If you claimed did you notify them of the carers allowance?

Either way you need to notify hmrc that the calculation is wrong and they will issue a correction. They will need to know the amount for last tax year, not the 2114 for this tax year.

If you cash the cheque you will need to pay some back eventually but at least you get your refund now. Alternatively send the cheque back with details of the carers allowance and wait for a new one for the correct amount.

John_Pierpoint

I would not send the cheque back, put is somewhere safe like in your bank account.
Then write and explain where the tax calculation appears to have gone wrong.

My mother did things the other way round and not even a letter from her MP could sort out the mess.

Remember these people work for you.

CrazyRed

Thank-you both for your advice. Given that this IS HMRC, I'll take your advice on board, John_Pierpoint and pay the cheque in before contacting them.

D&C - I had claimed a refund (using form P50 and declaring the CA) but it would appear that this letter from HMRC and my letter to HMRC have crossed in the post. The 2114 was for the last tax year - this year it's due to be a little higher (but still well below my personal allowance).

Thank-you, both.