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If you fall within the PAYE system

You will receive a P800 tax calculation if you owe more than £50 in tax providing it can be collected via your tax codes during the next tax year. If the tax can't be collected via your tax codes in the next year you will receive a PA 302 Simple Assessment instead. Whichever you receive, it is very important you check that the figures on the calculation are correct. If the figures are incorrect or the amount is less than £50, you should contact HMRC immediately giving them the correct information, the demand will be cancelled. If you agree with the P800 calculation, you should then try to understand why you did not pay enough tax before paying HMRC. This is important in working out whether you fall into one of the limited categories in which you can argue that you should not have to pay the bill.

It is possible that the underpayment has arisen due to your employer or pension payer not operating PAYE correctly. For example, they may not have applied the tax code that HMRC sent to them. If this is the case, HMRC should first seek the tax from the employer or pension payer, not from you. Alternatively, the underpayment might have arisen because HMRC itself failed to make timely use of information about you, which they had in their possession, this is covered by their concession ESC A19. In both cases you can ask HMRC to investigate and suspend collection until after they have done so. Also read the section 'How do I work out if I have paid enough tax?'

Posted in: Problems paying your tax