Taxpayers who are currently employed and paid through PAYE could be issued with tax reconciliations between now and October 2015, HM Revenue & Customs has confirmed.

Tax Overpayment Underpayment | Gorilla Accounting - Contractor Accountants

If you are believed to have underpaid or overpaid income tax in the 2014/15 tax year, you will receive a P800 form. Alongside this, HMRC has published guidance on the tax calculation process for those who have overpaid or underpaid income tax.

The P800 explains if the taxpayer believes the calculation is correct then they are not required to do anything. However, you should check the income against that on your P45, P60 and P11D for the year. This also clarifies that if there is an underpayment or overpayment, these will be resolved as follows:

  • For underpayments, the usual process is for HMRC to change the tax code for the next year. Although, if the money cannot be collected through the tax code, HMRC will write to the taxpayer explaining how to pay the underpayment.
  • For overpayments, HMRC will send a cheque within 14 days of issuing the tax calculation. This is automatic and does not require any action from the taxpayer.

Any taxpayer who believes HMRC’s calculations are incorrect will be required to contact HMRC on 0300 200 3300. We also have a contractor tax calculator so you check how much you should be taking home annually after tax.

Here at Gorilla Accounting, our contractor specialist accountants will manage any underpayments or overpayments for clients. We provide a same day response if you are in touch before 3pm under our client service guarantee and our all-inclusive accountancy package for contractors and freelancers is just £85 + VAT per month. If you are interested in this, call us on 0330 024 0406.