HM Revenue and Customs has begun distributing P800 letters to around four million UK households who have overpaid income tax.
The tax refund letters are being issued between June and August.
Overpaying tax is a common occurrence and can happen for several reasons, particularly when people are placed on incorrect tax codes.
This often affects employees paid through PAYE and pensioners, leading to more tax being deducted than necessary.
Pensioners are among those most commonly affected by tax overpayments. According to HMRC, individuals who receive a pension may be issued a P800 tax calculation letter if they’ve paid too much or too little tax.
This can happen when someone starts receiving multiple sources of retirement income — such as a state pension and a private pension and an incorrect tax code is applied.
Because the state pension isn’t taxed at source, HMRC adjusts the tax code on other income to collect what’s owed, which can sometimes result in overpayment.
P800 letters inform recipients that they are owed a refund and explain how to claim it.
HMRC’s campaign is aimed at returning money to those affected, with claims made online using official Government channels.
The most frequent cause of overpayments is the use of an incorrect tax code. Most UK taxpayers are entitled to a personal allowance of £12,570 before income tax applies.
GETTY | Taxpayers can check their current tax code on their most recent payslip,
This allowance is reflected in the standard tax code 1257L.
However, those with second jobs are often given different tax codes such as BR, D0, or D1, while individuals not entitled to any personal allowance may be placed on the 0T code.
Taxpayers can check their current tax code on their most recent payslip, P45, or by logging into their personal tax account via the government’s website using their Government Gateway ID - a free 12-digit number that gives access to online HMRC services.
To claim a refund, individuals will need their P800 reference number and National Insurance number.
While HMRC may issue a text notification prompting action, MoneySavingExpert stresses that HMRC will always send a letter first.
GETTY | Britons are being urged to check if they are entitled to a refund Refunds should only be claimed via the official gov.uk website, and taxpayers are advised to be cautious of scams involving fake emails, texts, or phone calls claiming to be from HMRC.
MoneySavingExpert warns that scammers frequently impersonate HMRC, particularly during periods of mass communication.
The site advises that the correct link for a refund will always be on a genuine GOV.UK page, and urges people to carefully check URLs before entering any personal details.
GETTY | If the taxpayer has underpaid due to an incorrect code, the outstanding amount must usually be repaid
In cases where a taxpayer has been on the wrong code for a long time, refunds can be claimed for up to four previous tax years. HMRC may extend this in certain situations, particularly if the error was their fault.
However, if the taxpayer has underpaid due to an incorrect code, the outstanding amount must usually be repaid.
Taxpayers are encouraged to act promptly and use official sources when responding to HMRC’s letters, especially during this busy summer refund period.