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HMRC clarifies further the status of the P800 tax refund and underpayment exercise
Thursday, November 4th, 2010
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HMRC’s weekly informal email to employer representatives dated 15 October provides more detail about the conduct and progress of the P800 Tax Calculation exercise.
Employers and representative bodies have asked us for more information about timelines and volumes so that you can manage the expectations of your employees and clients. NPS will attempt to reconcile every PAYE record. But, as has always been the case with the end of year process, there will be a minority of records where all the information needed is not available until much later. Around 80% of PAYE cases are correct and we will not send P800s to these customers. We hope to issue the bulk of the P800s by Christmas, with the remainder in January 2011.
You have also asked us for more information following last week’s update especially about the process of coding out, the appeal process, how to avoid paying interest on underpayments of £2000, and the £300 tolerance limit.
- The vast majority of P800 notices will go to those owing under £2000. The amount will automatically be ‘coded out’ in 2011-12. Customers in financial difficulty can ask HMRC to spread payment over a maximum of three tax years’ tax codes. No interest will be charged at any stage.
- Where for some reason, the underpayment can’t be coded out e.g. where it is £2,000 or more, or the PAYE source is insufficient to allow coding out or has ceased, we will not be expecting customers to pay until after 31 December 2010, and will write to customers after this date about how to pay. No interest will be charged provided the customer reaches agreement with us on how the money will be paid back, and makes those payments.
- Because of the number of calculations we expect from the reconciliation, we have temporarily increased the tolerance to £300. We expect this to reduce the level of customer contact and help us provide an acceptable level of customer service.
- If a customer thinks their calculation is wrong, they should contact us on the number shown on the P800. In the vast majority of cases any corrections can be made at the time of the call.
When we processed the initial batch of customer records in September we generated 42,000 overpayment calculations and 11,000 underpayment calculations. We carefully monitored calls to our contact centres related to the notices, as well as customer correspondence. The customer response was broadly as forecast; around 1.7% of customers with an overpayment contacted us and approximately 33% of those with an underpayment got in touch. A quarter of customer contact was handled by our IVR messaging. In particular only 10% of customers phoning about an overpayment needed to speak to an advisor. Many were simply chasing the arrival of their repayment cheque (which is produced by a separate system so goes out separately) and were satisfied with the IVR message telling them when to expect their cheque, asking them to ring back only if the cheque hadn’t arrived within this timeframe.
If customers who receive P800s don’t agree with the P800 or want clarification including when they will have to pay what they owe or get back any overpayments, they should refer to the P800 Notes (Understanding your Tax Calculation) and the P800 flyer ‘What Happens Next?’ sent with their P800.
Further information:
HMRC’s weekly employer update – 15 October 2010
Understanding and checking your P800 Tax Calculation
