P800 Refund

If you are expecting a P800 refund from HMRC, then no doubt you are wondering when you’ll get or want to check the status. In this guide, I’ll go through the reasons why tax refunds occur and how long it takes HMRC to pay you.

What is a P800 refund?

Once the tax year ends on 5 April, HMRC will check your records to see how much you have earned and how much tax you have paid. If they find out that you have paid too much income tax, then you’ll be automatically be given a tax refund.

Usually HMRC will let you know if you are due a tax refund by November by sending you a P800 letter.

p800 tax letter
P800 tax refund

Why do you get a P800?

The main reasons people receive a P800 is because they were on an incorrect tax code during the previous tax year.

It normally happens if you:

  • start a new job and not provided a P45
  • begin working for an employer after you’ve stopped self-employment
  • receive company benefits, like a company car
  • receive the State Pension

The result is you get put on an emergency tax code and you do not receive all of the personal allowance (or tax-free pay) you were entitled to. For the 2020/2021 tax year** you can earn up to £12,500 tax-free, but if you were on the wrong tax code or an emergency tax code you may not have received this.

Example

You earn a gross monthly salary of £2,500, if you were on the tax code 1250L which is the standard code for most people, you’ll receive a deduction of £1,041.67 before you start paying tax. That means you will pay income tax of £291.67 ((£2,500 – £1,041.67) x 20%).

If instead, you were on the BR tax code, you wouldn’t receive any free pay meaning you will be taxed on your full gross salary. You’ll pay income tax of £500.

By being on the emergency tax code you have paid additional tax of £208.33.

** 6 April 2020 to 5 April 2021

How long does a P800 refund take?

Instructions on getting your tax refund will be in your P800 letter. You can go online to claim your tax rebate electronically and get your refund within 45 days. If you don’t go online, you’ll get a cheque but this will take up to 60 days instead.

How to check your tax refund status?

If you think you are due a tax refund or want to check on the status of your P800 refund by calling HMRC on 0300 200 3300 or sign in to your personal tax account on the GOV.UK website.


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Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - the UK small business finance blog for the self-employed community. Here she shares simple, straight-forward guides to make self-employment topics like taxes, bookkeeping and banking easy to understand.