Tax Rebates & Refunds

Advice for people who have underpaid tax

January 27, 2013
Posted in Income Tax — Written by Jennifer

If you think you have paid too much tax in the last tax year, you will receive a tax refund from HM Revenue & Customs (HMRC) or you can file a tax rebate claim. However, if you have underpaid tax, you may receive a letter from HMRC advising that you need to repay it.

Before you automatically repay underpaid tax, there are a few things you need to know.

The P800 calculation

Firstly, you should know that letter you will receive if you’ve paid too much or too little tax is called a P800 calculation. This should include details of how your tax was worked out, and how it was calculated that you underpaid or overpaid tax. You should look over this very carefully, checking that all details are correct.

Paying back what you owe

After checking the P800, if you agree that you’ve paid too little tax, HMRC will let you know how to pay it back. The P800 will inform you whether the tax will be paid back in regular instalments along with your normal tax deductions, or whether you will need to pay it separately.

If you can’t afford to pay, you need to contact HMRC immediately to discuss spreading the payments out over a number of years.

Disputing the P800 calculation

If you think the calculation is wrong or you believe you have paid enough tax, you need to call HMRC to discuss the matter. Your calculation could be amended, in which case you will be sent a new one.

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