HM Revenue and Customs (HMRC) are currently issuing letters to tax payers who they believe have under or over paid tax during the tax years 2008/09 and 2009/10. 

The revised calculations are based on information provided by employers and pension providers who have paid income to the individual after deducting PAYE and National insurance at source.

Most individuals will have paid the correct tax and therefore should not expect to receive a letter, but those who do should check the tax calculation carefully to ensure the details are correct.

In order to check that a revised tax calculation is correct, you should

• Agree the amounts shown on the calculation to your forms P60, P11d or annual certificates for each source of income. 
• Ensure that the correct allowances have been applied to your calculation based on your age, marital status and any other circumstance affecting personal allowance.

If you agree that your calculation is correct then you do not need to take any action as any repayment will be made to you within seven days and any payment due under £2,000 will be collected from your future income using your PAYE coding notice which will be applied to your future salary or pension. Payments due over £2,000 will be collected separately and HMRC will tell you how to make this payment.

If you believe that your calculation is incorrect then you should contact HMRC as soon as possible to inform them of the error.

In some cases, where the underpayment should have already been collected by HMRC based on information already provided, it may be possible to be granted an extra statutory concession so that you do not have to pay back the amount.  This is a rare situation and is at the discretion of HMRC, so any individual who believes this is the case should contact HMRC as soon as possible.

If you would like assistance with checking your revised tax calculation or understanding future PAYE coding notices, please contact us to arrange a consultation.