What is a P800 tax calculation?

A P800 tax calculation is issued if, according to HMRC’s information, the taxpayer has underpaid or overpaid tax. The first wave of these annual tax reconciliations for 2018/19 started to land on doormats on 17 June 2019.

Who gets a P800?

Following the end of the tax year, HMRC carries out a reconciliation for anyone who received PAYE employment or a pension income in that year but who was not in self-assessment.

The reconciliation checks to see if – based on the information that HMRC holds – the taxpayer has paid the correct amount of tax for that year. Reconciliations are also carried out for taxpayers not in PAYE but who receive a state pension that exceeds their personal allowance.

When their work for 2018/19 is complete, HMRC estimate that 85% of those for whom a reconciliation is performed will have paid the correct amount of tax, 10% will be entitled to a refund, and 5% will have an underpayment.

It is the two latter groups that will be issued with a P800 or potentially a PA302 where simple assessment applies, to correct the position.

HMRC should not attempt to reconcile anyone who is in self-assessment. However, sometimes the flag that prevents reconciliation can be accidentally removed. If a taxpayer in self-assessment receives a P800 they should contact HMRC and advise that they will be submitting a tax return instead.

Timing

Given the vast numbers of taxpayer records that have to be reconciled, it takes HMRC some time to process and issue all the reconciliations. For 2018/19, HMRC aims to complete the bulk of reconciliations by November 2019, with the final deadline to complete the operation for the most complex cases being March 2020.

Since nothing is issued if the reconciliation does not throw up a discrepancy, a taxpayer who wants to know if HMRC has carried out a reconciliation can check by looking on their personal tax account (PTA). This information is not available to agents.

Bank interest

HMRC estimates that three-quarters of taxpayers for whom a reconciliation is performed will have bank interest. This information is provided by the banks directly to HMRC by 30 June following the end of the tax year.

Where HMRC’s records indicate that bank interest was received in 2017/18, it will wait until data has been received from the bank for 2018/19 before carrying out a reconciliation.

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