HMRC has quietly changed the way P800 tax refunds are issued from August, meaning workers who have overpaid tax through PAYE must now actively claim their money online rather than receiving an automatic cheque. The change applies to employees making multi-year tax refund requests and aligns with the wider P800 repayment process introduced in May 2024.
Under the previous rules, taxpayers who had paid too much tax over multiple years would be sent a cheque in the post after HMRC issued a P800 tax calculation. Now, even after a claim has been agreed, taxpayers must go online and request that the money is paid to them, according to HMRC guidance reported by Birmingham Live.
How the P800 tax calculation works
A P800 tax calculation is a letter sent by HMRC that shows whether you have paid the right amount of tax through PAYE, or if you have overpaid or underpaid. It is not a tax return or a bill, but simply a breakdown of your tax position for the year. P800s are only sent to people on PAYE, not to those who are fully self-employed or required to file a tax return.
When a taxpayer has paid too much tax, HMRC issues a P800 letter telling them they are owed a refund. However, from August, they must proactively request the repayment through HMRC's digital services instead of waiting for a cheque to arrive in the post.
Experts warn of unclaimed refunds
Tony Sanchez, founder of financial comparison site Bridging Loan Directory, said: "For taxpayers who act promptly, a bank transfer normally arriving within a week should be quicker and more convenient." He also warned that the change could lead to legitimate refunds going uncollected.
Sanchez added: "The danger is that money previously sent automatically must now be actively claimed. Some people will overlook the P800 letter, assume payment is on its way or struggle with the digital process, leaving legitimate refunds uncollected. Anyone receiving a P800 should check the calculation carefully and follow the official instructions rather than waiting for a cheque."
Sanchez also noted that if you are paying for work expenses or other essential costs that your employer does not cover, your P800 refund will not include everything you are due.
HMRC confirms the change
An HMRC spokesperson told Birmingham Live: "HMRC is changing how repayments are issued for the majority of employees who make a multi-year P800 tax refund request. Employees who make a claim for a multi-year tax refund will now need to request their repayment through HMRC's digital services, rather than automatically receiving a cheque."
The spokesperson added: "This change aligns multi-year claims with the wider P800 repayment process introduced in May 2024, where customers must take action to receive any money they are owed. Help your employees understand that they now need to request their repayment, rather than waiting for a cheque to be issued."
Taxpayers who receive a P800 letter should follow the official instructions and request their refund online to avoid missing out on money they are owed.
