If you are one of the fortunate!? people to have received a P800 from HMRC, then you would be wise not to simply accept their assessment of your under or overpayment of tax. The HMRC are using estimated values for much of the information, and you may end up paying too much tax.
Andrew Shaw, head of personal tax at accountants Kingston Smith LLP, said HMRC should do more to flag the estimated figures to taxpayers and told people to check the accuracy against their own records of their income.
He added that as interest rates on bank and building society accounts have fallen, many people could be paying tax based on income made when rates were higher.
‘When taxpayers receive a letter on official HMRC paper detailing their tax liability, many naturally assume that the numbers are correct. Our experience shows that this is not always the case, often because some of the figures used represent last year’s known income,’ said Shaw.
‘Whilst the earning taxed under PAYE are usually correct, the figured indicating other sources of income are sometimes simply wrong. This can occur for any number of reasons – for example, if the taxpayer’s dividends or bank interest have changed since the previous year, which is more likely than not.’