HMRC has completed checks on approximately 45 million PAYE accounts and has begun issuing P800 tax calculation letters to workers who have paid too much or too little income tax. The annual reconciliation process, which matches tax deducted from pay against what each employee should have paid, will continue until November 2026.
Overpayments are being prioritised, meaning workers who are owed money will be contacted first. The letters inform recipients whether they are due a refund or owe additional tax.
Umbrella workers urged to check P800 letters carefully
Seb Maley, chief executive of Qdos, an insurance provider for flexible workers, warned that the UK's estimated 700,000 umbrella workers should pay particularly close attention to their tax calculations. "Moving between assignments and PAYE employers means there can be more changes to keep track of," he said. "HMRC itself recognises that starting and finishing jobs can result in people paying the wrong amount of tax. So if you work flexibly, don't assume your tax position is automatically correct."
Maley added that being told you're owed money by HMRC doesn't always mean it will simply land in your account. "Depending on the circumstances, you may still need to actively claim it. More than 730,000 refunds went unclaimed last year, averaging £855," he said. "If you receive a P800, check the figures carefully, follow HMRC's instructions and make sure you claim anything you're owed."
How to receive your tax refund
If your tax calculation letter says you'll get a cheque, the letter will explain whether HMRC will send one automatically. You do not need to contact HMRC to make a claim - the cheque will be posted to you automatically. According to HMRC, you'll receive your cheque within 14 days of the date on your letter. If you're owed tax from more than one year, you'll get a single cheque for the entire amount.
What to do if you think your calculation is wrong
If you believe the amounts used in your calculation are incorrect, you should contact HMRC. You'll need to specify which amounts you think are wrong and what they should be. HMRC's review of PAYE accounts is part of its annual reconciliation process, which aims to ensure that every employee pays the correct amount of income tax over the course of the tax year.
