Almost eight million Britons could get some of their tax back this year and HMRC will warn them of this by letter. The P800 forms, sent out every June, are set to bombard recipients’ doors with sensational news this tax year.
Research by financial specialists RIFT analysed historical data to predict how many people are expected to receive the letter this year revealing they may be owed a tax return due to errors in the system that caused them to pay more tax than they owed.
In 2015, seven million forms were sent out affecting approximately 26.5% of tax-paying employees that year, and with an increase in tax-paying taxpayers this year, 26.5% would equate to almost 7.6 million people. In the vast majority of cases detected by specialists, the P800 affects tax-paying employees rather than self-employed taxpayers.
RIFT chief executive Bradley Post explained the growing number of people owed tax refunds by saying: “HMRC’s PAYE system is an extraordinary tax collection machine, but it’s not perfect and millions of mistakes are made every year. However, HMRC’s internal system of checks and balances means it often catches these mistakes with hindsight and does everything it can to ensure people receive the refund or top up what they owe.”
He urged people to keep an eye on his posts for “very good news”. The expert also noted that while HMRC easily catches the simplest cases, some more complex taxpayers may benefit from “appointing some tax refund experts to make sure they get every penny they are owed”.
What should you do if you receive a P800 letter from HMRC? Receiving this letter may mean that you have overpaid or underpaid tax and that you need to settle the balance by issuing a refund or by sending the rest of your debts to HMRC.
The letter will explain which category you fall into and what steps you should take based on your situation. If you are due a refund, RIFT experts recommend using the HMRC refund website application as it is the “quickest way” to submit your tax refund claim.
Those who do not have the option to do so or do not react within 21 days of the form being issued will simply receive a cheque from HMRC in the post. People who have paid less than they should will be told how much they owe and will need to pay it to HMRC as soon as possible. If you think there is an error in your final P800 calculation, you can challenge it by speaking to HMRC.
