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Where Taxpayers and Advisers Meet
PAYE tax calculations - round two
12/10/2010, by Low Incomes Tax Reform Group, Tax Articles - Income Tax
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LITRG releases updated guidance to help if you receive one of the large number of PAYE tax calculations HMRC are now issuing for the last two completed tax years.

Introduction

Following an initial ‘trial run’ in September, HMRC have now started sending out the main bulk of calculations to people who they think have overpaid or underpaid tax through PAYE during the last two tax years 2008/09 and 2009/10. Between now and Christmas they expect to send out some 1.4 million underpayment and over 4 million overpayment calculations.

Help for unrepresented taxpayers

The Low Incomes Tax Reform Group (LITRG) of the Chartered Institute of Taxation has updated and today re-published its advice on what to do if you receive one of these calculations (form P800). The full guidance is available on their website (see ‘useful links’ below). 

Introducing the guide, John Andrews OBE, chairman of LITRG, said:

‘Just because HMRC send you a P800 calculation doesn’t mean to say that the figures it shows are right, or that you have to repay any underpayment shown.’

He went on to summarise the main points of LITRG’s advice to taxpayers.

‘First, check the calculation to make sure it is correct, and if you find any errors, or are in doubt, contact HMRC. 

‘Next, if the statement shows you owe tax, consider whether you have to pay it back. It could be too late for HMRC to be entitled to assess it; or it could be down to your employer’s or pension payer’s error, in which case they (not you) are normally liable for any underpaid tax. 

‘Finally, consider whether HMRC ought to write off the tax under their concession A19, or under their complaints procedure.

‘If all else fails, HMRC ought to be prepared to give you time to pay. It was, after all, their delay that caused the unpaid tax to mount up. But do take care in negotiating payment terms with HMRC as your entitlement to means-tested benefits could be affected.’

Useful links

LITRG’s full updated guidance including four downloadable documents

For further background, read LITRG’s original article on the trial run and subsequent update.  

About The Author

The Low Incomes Tax Reform Group (LITRG) is an initiative of the Chartered Institute of Taxation to give a voice to those who cannot afford to pay for tax advice. LITRG comprises tax specialists from professional practice and the voluntary sector, from publishing and from HM Revenue & Customs, together with people from a welfare benefits and social policy background. Visit www.litrg.org.uk for further information.
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