Tax calculation chaos

By LBV

21 Sep 2010

It has been hard to miss the recent furore in the national press regarding Pay As You Earn (PAYE) underpayments and overpayments. There is no doubt that many taxpayers are affected.

“The vast majority of individuals do not need to worry. If you complete a self assessment tax return then you should not be affected at all because your tax liability should have been calculated correctly and your tax affairs should be up to date.

Those taxpayers who are affected should expect to get a tax calculation form P800 by Christmas 2010. If there is an overpayment it should be repaid automatically.

If there is an underpayment of less than £2,000 it will be collected through the 2011/12 tax code, or possibly longer if the taxpayer will suffer undue hardship. Underpayments of more than £2,000 must be paid directly, not through a code number.

This is normal for amounts over £2,000. Taxpayers may be able to seek time to pay by liaising direct with HMRC. In a surprise move, HMRC has announced it will write off “small” underpayments of less than £300, and those individuals will not be written to.

The P800 is not a demand but a tax calculation - a statement of what HMRC thinks the person’s tax position is. It is vital to check the P800 even if it shows an overpayment and a refund due. If there are errors, the taxpayer should tell HMRC.

If the calculation shows an underpayment and the demand seems to be correct, there are still situations where HMRC will agree not to recover any underpaid tax but these are rare. For example, where HMRC has had all relevant information but not made timely use of it.

If you have only held one employment during the period and have no other sources of income then you should have had the correct tax deducted.

If, however, you frequently move employments or have other sources of income then it is worth checking now that you have paid the correct amount of tax, especially if you are a higher rate taxpayer.

Richard Green
Personal tax adviser
Cassons chartered accountants and business advisers
 

Enjoyed this? Read more from LBV

Latest news

1

University recognises adidas curator Gary Aspden

University recognises adidas curator

11 Jul 2025

2

Investment drives growth plan at CoolKit Coolkit Vans

Investment drives growth plan at CoolKit

11 Jul 2025

3

Story Homes submits plans for 140 new homes in Longton Story Homes plans

Story Homes submits plans for 140 new homes in Longton

11 Jul 2025

4

University of Lancashire climbs 14 places in student positivity survey Happy students at ULAN

University of Lancashire climbs 14 places in student positivity survey

10 Jul 2025

5

Forbes Solicitors achieves strong growth and promotes 15 Forbes Solicitors promotions

Forbes Solicitors achieves strong growth and promotes 15

10 Jul 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV123 July/August Launch Event
Lancashire Business View magazine launch
Networking
16 Jul 2025

LBV123 July/August Launch Event

Burnley College University Courses Building, Burnley, BB12 0AN

08:30 - 10:30

Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Shaping Preston's future by remembering its past
1750160034867.png.png
LBV Hub Networking
16 Jul 2025 - 16 Jul 2025

Shaping Preston's future by remembering its past

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 20:30

Chamber Summer BBQ
LBV Hub Social
17 Jul 2025 - 17 Jul 2025

Chamber Summer BBQ

The Borough, Dalton Square, Lancaster, LA1 1PP

17:30 - 20:00

Preston Tech Connection: Web3 is Dead. Or is It?
July Longer Banner.jpg.jpg
LBV Hub Networking
29 Jul 2025 - 29 Jul 2025

Preston Tech Connection: Web3 is Dead. Or is It?

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:30

Preston Freelancer Meet-Up: July
Longer July Banner.jpg.jpg
LBV Hub Networking
31 Jul 2025 - 31 Jul 2025

Preston Freelancer Meet-Up: July

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Cumbria Business Expo 2025
https---cdn.evbuc.com-images-880461633-4862066883-1-original.20241022-110415.jpeg.jpg
LBV Hub Exhibitions
19 Sep 2025 - 19 Sep 2025

Cumbria Business Expo 2025

Carlisle Racecourse, Carlisle, CA2 4TS

09:00 - 15:00

North West Business Expo 2025
https---cdn.evbuc.com-images-880456273-4862066883-1-original.20241022-105445.jpeg.jpg
LBV Hub Exhibitions
24 Oct 2025 - 24 Oct 2025

North West Business Expo 2025

Bolton Stadium Hotel, Bolton, BL6 6SF

09:00 - 15:00

Lancashire Business Day 2025
241122lbvlancashiredaylhp0647web
Networking
27 Nov 2025

Lancashire Business Day 2025

Burnley FC , Burnley, BB10 4BX

12:00 - 17:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV122 Online Graphic
Subscribe now

Weekly news bulletin