HMRC describes current status of the P800 tax refund and underpayment exerciseWednesday, October 20th, 2010
As reported in an earlier newsletter, HMRC started to send out in early September a letter direct to individual taxpayers, informing them that HMRC’s records indicate that they have paid too much or too little tax for the tax years 2008/09 or 2009/10 tax years. The letter is accompanied by a P800 Tax Calculation form and a P800 Notes document that explains the numbered notes on the P800.
HMRC has published the following update on the status of this exercise.
“At the start of September, we sent out a relatively small batch of around 52,000 P800 calculations to customers who have overpaid or underpaid tax.
Reconciling people’s tax after the end of the year is a normal part of the PAYE process. But this is the first time we are doing the reconciliation using the new National Insurance and PAYE Service (NPS) IT system and we are doing two years at once as it was not done last year. The overwhelming majority of PAYE cases (more than 40m) are correct – so most people have paid the right amount of tax.
Over the last couple of weeks we have carefully reviewed the outcomes of this exercise. A few minor issues with the system came to light. We have put fixes in place for those and tested them to ensure they work. Contact from customers who received P800s has been low, and our Contact Centres have coped very well with the level of demand.
We have taken on board comments about how we could improve the explanatory notes sent with the P800s. These will be available shortly.
We are confident that the system is in as good a shape as it can be so we have moved to full live running. This means that the next batch of Forms P800 will start arriving this weekend (9th and 10th October).
We expect to issue around 90,000 P800s a day and hope to have completed the bulk of this exercise before Christmas. In total, around 4.3 million taxpayers will receive repayments, while an estimated 1.4 million will be sent letters explaining that they have underpaid along with an explanation of the Department’s calculations and how they can have the underpayment reviewed.”