PAYE tax calculations – be sure to check yours

Media reports in October suggested that HMRC have issued a number of incorrect 2014/15 tax calculations to PAYE taxpayers. It is hoped that this is a relatively small figure, but what should you do if you have received a calculation in recent weeks?

We always advise people to check PAYE tax calculations (known as form ‘P800’) carefully. This is because an automated system draws together the information HMRC receives about your tax position – mostly from employers and pension providers – and uses it to produce the tax calculation. You need to compare this to your own records to check that it is correct and complete.

If the calculation shows that you have not paid enough tax, you will be asked to arrange some means of paying the difference. If it shows that you are due a refund, you will be sent a cheque after receiving the calculation.

The 2014/15 calculations

Whilst we do not yet know the detail, we understand that there might be some discrepancies in the data that HMRC have drawn together for some people’s 2014/15 calculations. So if you have received a calculation in recent weeks, there is a chance (although hopefully only a small one) that it could be wrong. 

We understand that HMRC are reviewing the calculations and narrowing down the problem. In the meantime, we would suggest that you follow our guidance to check your P800 calculation. If, after following our guidance, you think your P800 calculation might be wrong, we suggest that you:

• do not worry! But equally, do not leave the matter - contact HMRC on the Income Tax helpline to discuss your concerns;
• do not pay anything if the calculation says you owe money, nor bank any cheque you receive for a refund, until you have clarified whether the calculation is correct.

If you need independent help, read the final section of our guide. This gives details of how to find a professional tax adviser, and information about getting help from one of two tax charities if you are on a low income and unable to afford advice.  

(18-11-2014)