His Majesty’s Revenue and Customs (HMRC) is sending unexpected ‘P800’ letters to people earning between £23,000 and £52,000-a-year. The letters are being sent out now that the tax year has finished. You may receive a letter if HMRC believes you owe money. If you realise that you’ve not paid enough tax because of an incorrect tax code, you’ll be required to repay what you owe.
To avoid a larger bill later down the line, it’s important to address any underpayments. If the underpayment wasn’t your error, you can request to have the tax written off by requesting an “Extra Statutory Concession” or an A19 from HMRC. However, success isn’t guaranteed.
Money Saving Expert, founded by financial guru Martin Lewis, said: “In most cases, you’ll have to pay it back – generally HMRC can only go back four tax years, but this extends to six years if you acted carelessly and 20 years if you acted deliberately.
“How you go about paying what you owe depends on the amounts involved and how HMRC has dealt with your case – though it’s always important to check you agree with HMRC about how much tax you’ve underpaid.”
“The official line from HMRC is that it is each individual’s responsibility to check they are on the right tax code.
“However, if your code was wrong there are some situations where you might not have to pay the tax bill.”
The advice continued: “Using an A19 – a little-known clause that lurks deep in HMRC’s complex book of rules – ISN’T guaranteed, and in fact it’s far from likely to work. But there is a possibility, so it may be worth giving it a go.”
However, for the A19 to work, the underpayment must have been made over 12 months ago, the financial experts cautioned.
