HM Revenue and Customs (HMRC) has been issuing letters to both pensioners and employees
Pensioners and workers who have tax issues could be in danger of receiving a letter from HM Revenue and Customs (HMRC). The government body is currently sending out both tax calculation letters (P800 letter) and Simple Assessment letters for those who have either overpaid or underpaid tax for the 2023/24 tax year.
According to official advice, these letters are dispatched between June and March of the subsequent tax year, meaning there’s still time for them to be sent out. These letters can be issued for various reasons, including if you’ve used the wrong tax code on your self-assessment, switched jobs, received payment from both in the same month, or started getting a workplace pension.
Moreover, a Simple Assessment letter might be sent if you owe tax that can’t be automatically deducted from your income or owe HMRC more than £3,000. It’s crucial to settle any tax debts with HMRC as they could impose penalties for late payments.
Typically, the penalty for a late tax payment is 5% of the original amount owed plus interest. Read below for a comprehensive explanation of what each letter signifies and why it might have been sent to you…
P800 letters (tax calculation letter)
P800 letters (tax calculation letter) According to official guidance, P800s are dispatched because you either owe tax or are due a refund.
This can be for the following reasons:
It could also occur if you started receiving a pension at work. If you owe tax to HMRC, it will generally be taken out automatically through Income Tax paid through an employer or pension provider or if you earn enough income over your Personal Allowance to cover the underpayment.
However, the P800 could also be informing you that you’re due a tax refund which can be claimed using the online bank transfer service or by requesting a cheque online. Tax refunds are generally given five working days after a claim is made online or six weeks after you asked HMRC for a cheque.
Simple Assessment tax bill
HMRC will generally send a Simple Assessment letter if it cannot automatically reclaim money owed. Official guidance states this can be the case for the following reasons:
This letter will contain important details you need to check such as your taxable income, any Income Tax you have already paid, and the total tax that you owe to HMRC. Full details on the different types of letters you could receive for overpaid and underpaid tax can be found here.
