HMRC Sending P800 and Simple Assessment Letters to Taxpayers for Tax Payment Issues

Introduction: Why is HMRC sending P800 and Simple Assessment letters to taxpayers?

When HMRC sending P800 and Simple Assessment letters to taxpayers for tax payment issues, many people feel worried or confused. These letters usually mean HMRC has found that you either paid too much or too little tax during the year.

The reason is simple: the PAYE system (Pay As You Earn) does not always collect the exact right amount of tax. If you have multiple jobs, a pension, or taxable benefits such as a company car, the numbers don’t always balance perfectly. Sometimes HMRC owes you money; sometimes you owe them.

Understanding what these letters mean and how to respond can help you avoid unnecessary stress, late payment interest, or penalties.

“Match every figure in the letter to a document you already have—never assume HMRC’s numbers are right.” — Chartered Tax Adviser

This guide explains the difference between a P800 tax calculation and a Simple Assessment, why HMRC sends them, how to respond, and how to protect yourself from mistakes.

What is a P800 tax calculation letter from HMRC?

Why does HMRC send a P800 letter?

A P800 tax calculation is HMRC’s way of checking whether you paid the correct tax under PAYE. HMRC compares the tax you should have paid with what you actually paid across all jobs and pensions.

Who usually receives a P800 tax calculation?

You might receive a P800 if you:

• Work for more than one employer in the same year

• Receive both wages and a pension

• Have a taxable benefit in kind, like a company car

• Had a tax code change that was applied too late

• Receive State Pension, which is taxable but not taxed at source

How does HMRC calculate overpaid or underpaid tax in a P800?

The P800 uses data from:

• P60/P45 (wages and tax deducted)

• P11D (benefits in kind)

• Pension statements (private and State Pension)

• Savings and dividends reported to HMRC

It then applies your personal allowance and tax bands to see if you overpaid or underpaid.

What is a Simple Assessment letter from HMRC?

How is a Simple Assessment different from a P800?

A formal tax bill is called a Simple Assessment (PA302). A Simple Assessment provides you with the precise amount HMRC estimates you owe and the due date, as opposed to a P800, which is a computation you may verify.

Who gets a Simple Assessment letter instead of a P800?

HMRC uses Simple Assessments when:

• The underpayment is too large to collect through PAYE coding

• State Pension or other income pushes you into underpayment

• You are liable for the High Income Child Benefit Charge (HICBC) but are not in Self Assessment

• You still owe taxes for the year even after you quit Self Assessment.

What tax years and income sources are included in a Simple Assessment?

The letter sets out the tax year and each income source used. It can include employment, pensions, benefits in kind, savings, dividends, and the HICBC. Always check each figure carefully.

Why is HMRC sending P800 and Simple Assessment letters to taxpayers?

What common tax payment issues trigger these letters?

• Multiple jobs or pensions in one year

• Incorrect or late tax code changes

• Untaxed State Pension

• Benefits in kind such as company cars

• Interest or dividends not taxed correctly

• Claiming or losing Marriage Allowance

• Liability to HICBC

How does PAYE lead to tax discrepancies?

PAYE collects tax as you earn, but it only works if your tax code is accurate. If your situation changes and HMRC updates your code late, you may underpay or overpay.

What role do pensions, multiple jobs, and benefits play?

• Pensions: private pensions use tax codes, but State Pension does not.

• Multiple jobs: if HMRC splits your allowance incorrectly, you may underpay.

• Benefits in kind: late or incorrect P11D forms can trigger adjustments.

How should taxpayers respond to a P800 tax calculation?

What steps should you take if you are due a refund?

• Check each figure against your P60, P45, and pension letters

• If correct, claim online via your Personal Tax Account or wait for HMRC to issue a cheque

• Keep all records for your files

What if HMRC says you owe tax in your P800?

• Verify the calculation

• If correct, HMRC may collect the underpayment by reducing your tax code next year (known as “coding out”)

• Alternatively, HMRC may ask you to pay directly

How can you check if the P800 calculation is correct?

• Match employment totals to your P60s

• Match State Pension to your DWP letters

• Check benefits in kind against your P11D

• Review savings/dividends against your bank or broker statements

“If you can’t reconcile a figure to a document, stop and ask HMRC for a breakdown before you pay.” — Former HMRC Inspector

How should taxpayers respond to a Simple Assessment letter?

What deadlines apply to paying tax from a Simple Assessment?

The deadline is shown on the notice, often 31 January after the end of the tax year. Missing it leads to interest and possible penalties.

How can you challenge or appeal against a Simple Assessment?

• Contact HMRC quickly if you spot an error

• Provide evidence such as P60s or pension letters

• If HMRC disagrees, you can submit a formal appeal in writing, usually within 60 days

What happens if you ignore a Simple Assessment?

HMRC can charge interest, enforce payment, and add penalties. Ignoring it will not make it go away.

What payment options are available if you owe HMRC money?

Can you pay HMRC online or by phone?

Yes, you can pay:

• Online via bank transfer or debit card

• Through your bank or building society

• By telephone banking

How do HMRC payment plans and instalments work?

• HMRC offers Time to Pay arrangements.

• Payments are spread into monthly instalments.

• HMRC checks your income and expenses before agreeing.

This option helps taxpayers who cannot pay in full immediately. By showing HMRC what you can realistically afford, you avoid penalties and build a manageable repayment schedule.

What happens if you cannot afford to pay the tax bill in full?

• Contact HMRC before the due date.

• Provide evidence of income, bills, and living costs.

• Ask about a Time to Pay plan.

What mistakes do taxpayers often make when dealing with P800 and Simple Assessments?

Do people assume a P800 or Simple Assessment is always correct?

• Many taxpayers accept HMRC’s figures without checking.

• Errors can occur with employment, pensions, or benefits data.

Always compare HMRC’s numbers to your own documents. If anything looks off, challenge it with supporting evidence.

Why do some taxpayers miss deadlines?

• Moving house without updating HMRC’s address records.

• Ignoring the letter during busy or holiday periods.

Missing deadlines can lead to fines and extra interest. Mark the due date as soon as you open the letter to stay on track.

What happens if you ignore HMRC letters?

Ignoring letters leads to:

• Interest and late fees

• Reduced future take-home pay if coding out is applied

• Enforcement action in serious cases

How can you avoid receiving unexpected P800 or Simple Assessment letters in the future?

Why is updating your tax code important?

• Report new jobs, pensions, or benefits quickly.

• Ensure HMRC’s code matches your real situation.

Keeping your tax code correct reduces the chance of unexpected underpayments and avoids surprise letters at year-end.

How does reporting additional income early help?

• Enter side income in your Personal Tax Account.

• Your tax code may be changed by HMRC during the year.

In this manner, you avoid receiving a year-end P800 or Simple Assessment charge and your PAYE tax remains accurate.

What role does keeping financial records play?

Good record-keeping helps you check HMRC’s calculations and challenge errors quickly. Keep:

• P60s and P45s

• P11D forms

• Pension statements

• Bank and investment records

What’s the difference between a P800 and a Simple Assessment?