HM Revenue & Customs (HMRC) has started the annual automated End of Year Reconciliation process to check whether customers in PAYE (Pay As You Earn) have paid the right amount of tax in 2012-13.
Most people – around 85 per cent of those in PAYE – will have paid the right amount of tax for the year so won’t receive any contact from HMRC. If you have paid too little or too much tax under PAYE for 2012-13, HMRC will automatically send a tax calculation (on form P800) to you showing the details along with notes explaining what it means. It’s expected that this automated process will be completed by October 2013, and there is no need to contact HMRC.
If you have:
- Paid too much tax, you will be sent a cheque, in most cases, within 14 working days from the receipt of a P800 Tax Calculation.
- Paid too little tax, the underpayment will in most cases be automatically collected through your 2014-15 annual tax code over 12 months. Where this is not possible, HMRC will write to you and let you know what options are available to pay the tax outstanding.
Millions of P800 calculations will be sent out!
The P800’s are likely to contain errors because:
- Large amounts of data are manually input
- Estimates especially for Bank Interest and Investment Income
So check the following carefully:
- P60 – you get this at the end of each tax year
- P45 – you get this when you leave a job
- PAYE Coding Notice
- P11D Expenses and benefits
- P9D Expenses payments and income from which tax cannot be deducted
- Bank and Building society statements
- Pension Tax Deductions
Its expected that around 3 million people will be asked to pay more tax and around 2 million people will have overpaid.
Here is a link to the HMRC Helpsheet on understanding your P800
steve@bicknells.net
