P800 tax calculation letters explained

A P800 is HMRC’s end of year tax calculation for people who pay tax through PAYE and are not in Self Assessment. It tells you whether you paid too much or too little tax for the year that ended on 5 April, how any refund will reach you and how any underpayment will be collected, which is usually through your tax code over a later tax year.

Why has HMRC sent me a P800?

After each tax year ends on 5 April, HMRC reconciles every PAYE record. It compares the tax that employers and pension providers deducted with the tax due on all the income it knows about. If the two do not match, it sends either a tax calculation letter (the P800) or a Simple Assessment letter. These letters are sent between June and March of the following tax year, and HMRC says it calculates everyone’s Income Tax for the previous year between June and November.

You will only get a P800 if you are employed or receive a pension. If you are registered for Self Assessment, any overpayment or underpayment is dealt with through your Self Assessment account instead, and you will not get a P800 or a Simple Assessment letter.

HMRC lists the usual reasons for a P800:

• you were on the wrong tax code, for example because HMRC had the wrong information about your income;
• you finished one job, started a new one and were paid by both in the same month;
• you started receiving a pension at work;
• you received Employment and Support Allowance or Jobseeker’s Allowance.

Since 2 July 2017, when HMRC changes a tax code during the year it runs a full calculation for the year and adds an In Year Adjustment, so that extra tax is collected over the remaining weeks or months on a week 1 or month 1 basis (PAYE Manual PAYE90025).

What does the calculation show?

The letter sets out the income HMRC has used for the year, the tax that should have been paid on it and the tax actually deducted, ending with a refund or an amount owed. If HMRC was already collecting an older debt through your code, the calculation also shows whether that debt was collected. HMRC’s PAYE Manual (PAYE14010) gives this example: if you are overpaid by £300 on PAYE but have £150 of coded debt, the calculation collects the £150 and repays the balance.

Before acting on the letter, check each figure against your P60, P45 and payslips. You can also see the same calculation through HMRC’s online service for checking how much Income Tax you paid last year. That service is not available if you paid any part of your Income Tax for that year through Self Assessment.

How do I get a refund shown on a P800?

The letter tells you which route applies to you.

• If it says you can claim online, you can use the online bank transfer service or ask for a cheque online. You need the reference number from the P800 and your National Insurance number. You can also claim through your personal tax account or the HMRC app if you have a UK bank account, or by contacting HMRC.
• If it says you will get a cheque, you do not need to do anything. The cheque should arrive within 14 days of the date on the letter, and if you are owed tax for more than one year you get a single cheque for the total.

HMRC says an online claim is paid within 5 working days, while a cheque you ask for online takes up to 6 weeks. HMRC’s equality impact assessment for its “Modernising Repayments” project explains that it is moving away from sending cheques automatically and asking people to choose how to be paid, so read your letter carefully rather than waiting for a cheque that may never be sent.

How is an underpayment collected?

HMRC will usually collect what you owe by reducing your tax code, which increases the tax taken from your wages or pension. The extra tax is normally spread in equal instalments over 12 months from the start of the following tax year. This happens automatically if all of these apply:

• you pay Income Tax through an employer or pension provider;
• you earn enough above your Personal Allowance to cover the underpayment;
• you owe less than £3,000.

The PAYE Manual (PAYE90025) confirms that only underpayments of up to £2,999.99 can be recovered through the tax code. The higher graduated limits of up to £17,000 that apply to other HMRC debts do not apply to PAYE underpayments (DMBM618010). The rules are explained in more detail in our guide to coding out underpaid tax.

Illustration only. A P800 issued in autumn 2026 shows a £600 underpayment for 2025 to 2026. Following the pattern in HMRC’s PAYE90025 examples, the underpayment is coded into the 2027 to 2028 tax code, so roughly £50 a month extra is deducted from April 2027 to March 2028.

What if it cannot be collected through my code?

HMRC then issues a Simple Assessment under section 28H of the Taxes Management Act 1970. You might get one if you owe tax that cannot be taken out of your income automatically, owe HMRC more than £3,000, or have to pay tax on your State Pension. For the 2025 to 2026 tax year, if the letter is dated before 31 October 2026 you must pay by 31 January 2027; if it is dated on or after 31 October 2026, you must pay within 3 months of the date of the letter. If you think a Simple Assessment is wrong, you must contact HMRC within 60 days. If you cannot pay in one go, see Time to Pay arrangements.

Can I pay an underpayment straight away instead?

Yes. HMRC says you can pay before the start of the following tax year if you prefer not to have it taken through your code. The PAYE Manual (PAYE90010) explains that you can pay online, by bank transfer or by cheque. If you pay outside your online account, the 17 character reference is your National Insurance number, then “P800”, then the year in which the underpaid tax year started. HMRC’s example for 2025 to 2026 is QQ123456BP8002025. Getting the reference wrong is the usual reason a payment is not matched and the code is not changed.

Where a voluntary payment covers the underpayment, HMRC sets it against the result and repays any surplus. Where it only partly covers it, the rest is collected through the code.

What if my employer deducted too little tax?

If an employer fails to deduct the right amount of PAYE, the employer is liable for the shortfall, and HMRC should recover it from the employer rather than from you unless it makes a direction under regulation 72(5) or 81(4) of the Income Tax (PAYE) Regulations 2003 (PAYE90030). A direction moving the liability to the employee can be made where the employer took reasonable care and the error was made in good faith, or where the employer cannot pay and the employee knew the employer had wilfully failed to deduct tax. If the underpayment arose because your employer used the wrong figures, it is worth asking HMRC whether the employer should bear it.

Does HMRC’s own delay mean I do not have to pay?

Sometimes. Extra Statutory Concession A19, reproduced at PAYE95005, allows HMRC to give up arrears of Income Tax that result from its failure to make proper and timely use of information supplied by you about your own income, by your employer where it affects your coding, or by the Department for Work and Pensions about your State Pension or a disability or widow’s pension. Tax is normally given up only if you could reasonably have believed your affairs were in order and you were told about the arrears more than 12 months after the end of the tax year in which HMRC received the information.

Illustration only. You tell HMRC in May 2023 that you have started receiving a second pension, but your code is not updated. HMRC first writes about the resulting underpayment in a P800 sent in late 2025. Because the arrears were notified more than 12 months after the end of the 2023 to 2024 tax year, you could ask HMRC to consider ESC A19, quoting the date you gave them the information.

What should I do if the P800 looks wrong?

Contact HMRC and tell them which amounts you think are wrong and what they should be. If HMRC agrees, it sends a new calculation; if it disagrees, it will explain why.

What mistakes do people make with P800s?

• Waiting for an automatic cheque when the letter says to claim online.
• Paying an underpayment directly and also leaving it in the tax code, or using the wrong payment reference so the payment is not matched.
• Accepting an underpayment caused by employer error without asking whether the employer should pay it.
• Ignoring ESC A19 where HMRC had the information for a long time and did nothing with it.

For other letters you may receive, see HMRC letters explained. If you left a job part way through the year and want a refund before the P800 arrives, see claiming tax back after leaving a job.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

Related Accountapedia entries

• HMRC Simple Assessment explained
• How tax on pension income is collected
• Using your HMRC personal tax account
• Self Assessment deadlines for 2026 to 2027
• Is the State Pension taxable

Sources

• GOV.UK: Tax overpayments and underpayments
• GOV.UK: Check income tax last year
• GOV.UK: Manual page PAYE90025
• GOV.UK: Manual page PAYE14010
• GOV.UK: If youre due a refund
• GOV.UK: Modernising repayments p800 screening equality impact assessment
• GOV.UK: If you owe tax
• GOV.UK: Manual page DMBM618010
• legislation.gov.uk: Act 1970 c. 9, section 28H
• GOV.UK: Simple assessment

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.