You open the post and see HMRC on the envelope. Inside is a P800. Your first thought is usually one of two things: “Have I done something wrong?” or “Am I finally getting a refund?”
In practice, a P800 often shows up after a normal life change — starting a new job, taking a second role, beginning a pension, getting a company car, or simply having the wrong tax code applied for a few months. Under PAYE, tax is taken “as you go”, but it relies on HMRC’s information being up to date. When it isn’t, small mismatches can add up by the end of the tax year.
To show how common PAYE mismatches can be, the Financial Times reported (from FOI-based data) that over 5.5 million people overpaid Income Tax in 2023/24, totalling around £3.47bn.
In this guide, we’ll explain what a P800 is, why you’ve received one, how HMRC calculates it, and exactly what to do next — especially if you think it’s wrong.
Quick answer:
A P800 is HMRC’s end-of-year PAYE tax calculation. It explains whether you paid too much Income Tax (an overpayment and possible refund) or paid too little (an underpayment). HMRC works it out by comparing the PAYE income and tax details it receives from employers and pension providers with the tax you should have paid for that year.
Brief outline
- Relatable UK intro: why P800 letters land unexpectedly and what you’ll learn
- Quick Answer “Answer Box” definition of a P800 (40–60 words)
- What a P800 is — and what it isn’t (not a bill in all cases; not Self Assessment)
- Why HMRC sends a P800: top causes (job changes, multiple incomes, tax code issues, benefits in kind, pension/state pension interactions, interest)
- How HMRC calculates a P800: where the data comes from and the end-of-year “reconciliation” process
- How to read your P800: key lines, totals, and cross-checks with P60/P45/payslips/P11D
- “How to check your P800 is correct” step-by-step checklist
- Common mistakes section + quick “cause vs check” table
- Worked example: overpayment (changing jobs/misused tax code)
- Worked example: underpayment (benefits in kind + state pension / coding issue)
- What happens next: timelines, refund vs underpayment routes
- If you’re due a refund: bank transfer/cheque basics and what you need
- If you owe tax: how HMRC typically collects (tax code adjustment / pay early / other options)
- Reduce the chance of another P800: practical PAYE habits + CTA + FAQ + Sources + disclaimer
What is P800?
A P800 is a tax calculation letter that HMRC may send after the end of a tax year if, under PAYE, you haven’t paid the right amount of tax. It tells you whether you’ve underpaid or overpaid, and what happens next (refund or collection).
HMRC states you’ll typically only get this type of calculation letter if you’re employed or get a pension (i.e., taxed via PAYE).
What a P800 is not
- Not a Self Assessment tax return. A P800 is a PAYE reconciliation; it doesn’t mean you must complete a tax return. (Some people do still need Self Assessment for other reasons, but that’s separate.)
- Not automatically a demand for immediate payment. If it’s an underpayment, HMRC often collects it by adjusting your tax code for the following year rather than asking for a lump sum straight away.
- Not proof of a scam — but scammers copy them. HMRC will not ask you to “verify” bank details via a random link or demand gift cards/crypto. Treat any unexpected link with caution and use your HMRC account via GOV.UK.
Why HMRC sends a P800
HMRC issues a P800 when the tax taken through PAYE doesn’t match what you should have paid for the year, based on the information HMRC holds. Common triggers include:
- Changing jobs mid-year (P45 not processed in time; emergency tax; overlapping employments)
- Having more than one job or pension (Personal Allowance effectively used twice if codes aren’t split correctly)
- A tax code that didn’t reflect your situation (for example, untaxed income, benefits in kind, or deductions that should have been included)
- Benefits in kind (e.g., company car, medical insurance) reported via P11D or payroll benefits — affecting how much tax should be collected
- Starting or stopping a pension (new PAYE income stream; code not updated quickly enough)
- Taxable income not fully captured in your code (for example, some untaxed interest or other adjustments that should reduce allowances)
- Timing/data issues (information arrives late or is corrected after the year ends, prompting HMRC to reconcile again)
How HMRC calculate a P800?
Think of HMRC’s P800 as an end-of-year “balance check” on your PAYE record.
Step 1: HMRC gathers PAYE information for the year
Your employer(s) and pension provider(s) use your tax code to work out how much Income Tax to deduct from each pay/pension payment. HMRC tells them which tax code to use.
Over the tax year, HMRC receives pay and tax information through PAYE reporting from employers/pension providers, then later reconciles the year once expected information is received (including, where relevant, benefits forms and third-party info).
Step 2: HMRC works out your “taxable income” for the year
HMRC totals up income taxed through PAYE (jobs and pensions) and applies relevant adjustments it holds — for example:
- Benefits in kind reported by employers (via P11D where not payrolled)
- Items that reduce your tax-free amount in the code, such as untaxed income or company benefits (the GOV.UK explanation of how tax code numbers are built is useful here).
Step 3: HMRC applies allowances and calculates the tax that should have been paid
HMRC starts from your Personal Allowance and then adjusts it according to what it knows about you (again, reflected through the tax code mechanism).
The point of the P800 is to compare:
- Tax that should have been paid for the year (based on HMRC’s final view of your income/allowances), with
- Tax actually deducted through PAYE during the year.
Step 4: HMRC compares “tax due” vs “tax paid”
- If tax paid > tax due, you have an overpayment (refund due).
- If tax paid < tax due, you have an underpayment (tax owed).
Step 5: HMRC issues the P800 and tells you what happens next
If you’re due a refund, the P800 explains how to claim/receive it.
If you owe tax, HMRC explains how it will usually be collected — commonly via a tax code change, spread over 12 months from the start of the next tax year, where HMRC’s criteria are met.
How to read your P800
A P800 layout can vary slightly, but the practical checks are consistent. Have these documents to hand:
- P60(s) for the year (or final payslip if no P60)
- P45 if you changed jobs
- Pension statements / P60 for pension income
- Any benefits information (e.g., company car/medical — often shown on a P11D or payroll benefits)
Key sections to sanity-check
- Tax year (make sure it’s the year you expect)
- Income sources listed (each employer/pension provider should be present)
- Pay from each source (compare to P60/P45)
- Tax taken from each source (compare to P60)
- Benefits in kind/adjustments (if you had benefits, are they included?)
- Total tax due vs total tax paid (this is the “bottom line” that creates the refund/underpayment)
How to check your P800 is correct
- Match the tax year on the P800 to the P60s you’re using.
- List your income sources for that year (jobs + pensions). Confirm HMRC has included them all.
- Check pay and tax figures employer-by-employer against your P60/P45/final payslip.
- Check your tax code history (if you can, review it in your HMRC Personal Tax Account). A wrong code is a common root cause.
- Confirm benefits in kind: if you had a company car/medical insurance, confirm whether it was payrolled or reported on a P11D and that the value shown makes sense.
- Look for “double Personal Allowance” symptoms: two employments both using a full allowance-style code can create an underpayment.
- If anything doesn’t match, gather evidence (P60/P45/payslips/benefit details) and contact HMRC using the details on GOV.UK or your letter.
Common mistakes
Here are issues we regularly see when clients bring a P800 to us.
| Common cause behind a P800 | What to check on your side |
| Job change/emergency code used too long | Compare P45 leaving pay/tax to new employer’s first payslips; look for sudden code changes |
| Two jobs/pensions, both using too much allowance | Check tax codes for each source; confirm which one should get your main allowance (GOV.UK) |
| Benefits in kind are not reflected during the year | Check if benefits were payrolled or on P11D; confirm the benefit value and dates (GOV.UK) |
| HMRC records didn’t include a pension for part of the year | Confirm pension payer and totals; check if pension started mid-year |
| Incorrect estimated income used for coding | Update your estimated income in your HMRC account if it’s out of date (GOV.UK) |
Worked examples
These examples use realistic (but fictional) figures to show how a mismatch happens. The aim is to make the mechanics clear — not to mirror every edge-case in the PAYE rules.
Worked example 1: P800 overpayment
Scenario: Sarah Patel changes jobs in October. Her new employer initially puts her on an emergency-style basis while HMRC processes her details. For a few payslips, too much tax is deducted.
- Tax year: 6 April to 5 April
- Sarah’s pay:
- Job A (Apr–Sep): £18,000 gross, tax deducted £1,100
- Job B (Oct–Mar): £24,000 gross, tax deducted £3,900
- Job A (Apr–Sep): £18,000 gross, tax deducted £1,100
- Total pay: £42,000
- Total tax deducted via PAYE: £5,000
What HMRC does at year end:
HMRC reconciles Sarah’s record and calculates the tax due for the year based on her final totals and allowances. Let’s say HMRC’s calculation shows her tax due should have been £4,450 for the year.
Result on P800:
- Tax paid: £5,000
- Tax due: £4,450
- Overpayment: £550 → Sarah is due a refund.
Why this happens:
PAYE taxes each payday using the information and tax code available at the time. If the tax code lags behind reality during a job change, the “in-year” deductions can overshoot, and HMRC corrects it with a P800 after the year ends.
Worked example 2: P800 underpayment
Scenario: James O’Connor has one job and also receives a small company benefit (private medical cover). The benefit is reported after the year ends (via P11D), and his tax code during the year didn’t fully account for it.
- Job income: £36,000
- Tax deducted during the year: £4,200
- Benefit in kind (medical insurance): £1,200 (taxable value)
How the underpayment arises:
At year end, HMRC treats the benefit as taxable (it’s part of what you’re taxed on, even though it’s not cash pay). So James’s taxable “package” becomes:
- £36,000 + £1,200 = £37,200 taxable income basis (before allowances)
Let’s say HMRC’s final calculation shows the tax due for the year should have been £4,500 once the benefit is included.
Result on P800:
- Tax paid: £4,200
- Tax due: £4,500
- Underpayment: £300 → James owes £300.
What typically happens next:
If HMRC’s conditions are met, they often collect it by adjusting James’s tax code for the next tax year, spreading collection across 12 months from the start of that year.
What happens next
Once HMRC issues a P800, the next steps depend on whether it shows an overpayment or an underpayment:
- Overpayment: the P800 explains how you receive/claim the refund.
- Underpayment: HMRC explains whether it will collect via your tax code (common) or whether you can/should pay sooner.
If you’re due a refund
HMRC’s P800 refund process depends on what the letter says.
If the P800 says you can claim online
GOV.UK explains that you can claim using HMRC’s online service (bank transfer or request a cheque online). You’ll need:
- The reference number from your P800
- Your National Insurance number
If the P800 doesn’t offer online claiming
Sometimes HMRC issues refunds by cheque automatically (for example, depending on the circumstances described in your letter). Follow the instructions on the P800 itself and use GOV.UK guidance if you’re unsure.
Safety note: only enter details through the official GOV.UK route (start from GOV.UK, not a text message link).
If you owe tax (how HMRC typically collects it; what options exist)
If your P800 shows an underpayment, HMRC says it will usually collect the tax by changing your tax code, increasing deductions from your wages/salary/pension.
The common approach: tax code adjustment
HMRC guidance explains it’s usually collected in equal instalments over 12 months, starting from the beginning of the following tax year (6 April), where the criteria are met.
Option to pay sooner
GOV.UK also covers paying what you owe from a P800, including paying it before the start of the following tax year.
If the amount is large or your circumstances make coding difficult, HMRC may handle it differently (and in some cases issue a different type of assessment letter), so it’s important to read the specific wording on your letter and cross-check GOV.UK guidance.
If you think it’s wrong, what to do
First: don’t panic. A P800 is only as good as the information behind it.
Checklist
- Re-check pay and tax figures against your P60/P45/final payslips
- Confirm HMRC has included all employments/pensions (and only those that are yours)
- Review benefits in kind entries (P11D/payrolled benefits)
- Review your tax code logic (does it reflect untaxed income/benefits/deductions?)
- If anything is missing or wrong, contact HMRC (use GOV.UK contact routes and keep a note of dates/times)
Evidence to gather
- P60(s), P45, payslips (especially around job changes)
- Pension P60s / annual statements
- Benefits info (P11D figures or confirmation of payrolled benefits)
- Any HMRC notices/letters about tax code changes (if you have them)
Tip from an accounts perspective: if the P800 is wrong because the inputs are wrong (for example, an employer submitted incorrect figures), you may need HMRC and/or the employer to correct the underlying PAYE reporting before the calculation can be corrected.
How to reduce the chance of another P800
A P800 is often avoidable with a few PAYE habits:
- Check your tax code when something changes (new job, second job, pension start/stop, new benefit). Your employer/pension provider uses it to deduct tax.
- Use your HMRC Personal Tax Account to check estimated income and code changes, and update details if they’re out of date.
- Keep P45/P60 paperwork somewhere easy to find — it’s your best cross-check.
- If you receive benefits in kind, understand whether they’re payrolled or reported on P11D, and expect your code to reflect them.
- If you have multiple income sources, make sure your allowances are allocated sensibly (HMRC sets the codes, but you can flag issues quickly).
FAQs
1) What is a P800?
A P800 is HMRC’s PAYE tax calculation letter showing an overpayment (refund) or underpayment (tax owed).
2) Why did I get a P800 when my pay never changed?
It can still happen if your tax code was wrong for part of the year, or HMRC received updated information later (for example, benefits in kind).
3) Does a P800 mean I’m in trouble?
Not usually. It’s often just HMRC reconciling PAYE where the “in-year” tax deducted didn’t match the final calculation.
4) How does HMRC know what I earned?
Your employer or pension provider reports pay and tax under PAYE and uses your tax code to deduct tax.
5) How do I claim a P800 refund online?
If your letter says you can claim online, GOV.UK says you’ll typically need the P800 reference and your National Insurance number to claim via HMRC’s service.
6) Will HMRC automatically pay the refund?
Sometimes it’s automatic, sometimes you’re invited to claim online — follow your P800 instructions and GOV.UK guidance.
7) How does HMRC collect a P800 underpayment?
HMRC will usually collect it via a tax code adjustment, often spread in equal instalments over 12 months from the following tax year, where applicable.
8) Can I pay the underpayment straight away?
Yes — GOV.UK explains you may be able to pay before the start of the following tax year (depending on your situation).
9) What if my P800 is wrong?
Check it against your P60/P45/payslips and benefits information, then contact HMRC with evidence if the figures don’t match.
10) How can I avoid getting another P800?
Regularly check your tax code and update job/pension changes in your HMRC account so PAYE stays aligned during the year.
Summary
A P800 is HMRC’s way of balancing the books after the tax year ends — comparing what PAYE took from your wages/pension with what you should have paid based on HMRC’s final information. If it’s right, follow the letter: claim your refund or understand how an underpayment will be collected. If it looks wrong, check it line-by-line against your paperwork and challenge it with evidence.
