P800 tax calculation letters

Information about P800 tax calculation letters and how to handle them in Sage 50 Payroll.

HMRC sends a P800 letter to your employees when they’ve paid too much or too little tax in a prior tax year.

The letter advises the amount under or overpaid, and typically HMRC issues a new tax code to recover underpaid tax.

As the employer, you receive any new tax code notification separately to the employee's P800 letter.

HMRC bases the letters on the RTI data you submit from your software. This information details the employee's taxable pay, and how much tax they paid each pay period.

If your employee has a second employer, HMRC uses the RTI data from both employers.

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Common cause

Although there are other causes, Week 53 is a common cause for HMRC issuing a P800 letter.

When you process Week 53 for an employee, they get tax relief in the extra pay period.

This is what HMRC requires, however it also means the employee gets more tax relief in the tax year than their entitlement allowed.

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What you need to do

You don't need to take action until HMRC issues you the new tax code.

When it arrives, apply the employee's new tax code promptly using any 'effective from' date that HMRC provides.

More information

To find out more about these letters, visit the HMRC P800 letter FAQ article.

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