HMRC confirms £473 payments to 700,000 as letters sent | Personal Finance | Finance

HM Revenue of Customs has told 700,000 people are due payments averaging £473 – but they need to take action. In a new post on X, officials told workers that hundreds of thousands of letters were sent our earlier this year – and that people are due to be paid money back.

The P800 letters are sent to individuals who are owed tax, and the government organisation has stated that the average claim stands at a substantial £473. A spokesperson for HMRC sai: ““We wrote to customers this summer to inform them they are due a refund, and need to claim it. Customers can follow the straightforward instructions in the letter, which explain how they can quickly and easily claim it online on GOV.UK or via the HMRC app.”

The letter being referred to is the P800 Tax Calculation. These are issued to individuals who have either overpaid or underpaid tax according to HMRC. It provides a detailed explanation of the error in your tax calculation and how to rectify it, either by claiming your overpaid tax back from HMRC or settling the remainder of your tax bill.

Reasons individuals overpay tax include:

• Having more than one job in a tax year.
• Changing jobs and your new employer not getting your details in time.
• Stopping work part way through the year.
• Having savings interest or certain benefits taxed incorrectly.

Instructions on how to proceed are typically included in the letter and can also be found on the Gov.uk website. Alternatively, the letter may state that HMRC is sending you a cheque, in which case there’s no need to contact the department to claim your refund as you should automatically receive the cheque within 14 days of the date on your letter.

In a new post on X today, HMRC said: “Remember getting a letter about a tax refund but didn’t do anything about it? Last year, almost 700,000 people didn’t claim back the money they’re owed. Download the HMRC app to check.”

Earlier this summer, HMRC highlighted that nearly one million people had not yet claimed their tax refund. Approximately four million P800s were anticipated to be dispatched this summer, with the final batch expected to be delivered by 30 November 2025.

Only those who are employed or receive a pension will receive these letters. Any other individuals registered for Self Assessment tax returns will have their tax bill adjusted automatically.

Tax refunds can amount to thousands and claims can be backdated up to four years. Therefore, individuals who received P800 letters as far back as 2021 may still be eligible to claim their money.

BBC Radio 4 Money Box Journalist Dan Whitworth has said: “These are known as P800 letters. They are sent when HMRC believes you’ve overpaid tax, often due to changes in your employment or circumstances that haven’t been reflected immediately in your tax code.

Mr Whitworth said: “If you get one of these letters, the advice is simple: check it carefully. You can log in to your personal tax account or the HMRC app to confirm the refund and have it paid directly into your bank. For those unable to use online services, you can contact HMRC by phone on 0300 200 3300 or by post to Pay As You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS”.

“These letters are genuine and could mean you are owed hundreds of pounds.”

As P800 letters continue to land on doorsteps, experts have issued warnings about fraudsters exploiting the situation. Money-Saving Expert has highlighted that scammers may attempt to impersonate HMRC and offer these refunds via text, email or phone call.

However, this is a clear indication of a potential scam as HMRC will always contact taxpayers by post if they are due a tax refund, not online, although the claim process can be completed digitally. HMRC will never request a payment or randomly contact you to confirm banking details.

The Gov.uk website provides an online checker tool where individuals can verify if they are owed a tax refund from previous years. Most tax refunds occur because people have overpaid income tax due to complications during the tax year such as changing jobs or having multiple sources of income.

This could include overpaying tax on pensions, job income, redundancy payments, UK income for those living abroad, foreign income for those residing in the UK, and interest from savings or payment protection insurance. One of the most common reasons for paying the incorrect amount of tax is having the wrong tax code.

Each individual is allocated a tax code by HMRC, which is determined by their income and sets out their personal allowance. This allowance is the sum you can earn each year before you are required to pay income tax.

1257L is the most prevalent code and applies to individuals with a single source of income from employment or pension. It signifies that their personal allowance is £12,570.

Tax codes featuring ‘W1’, ‘M1’, or ‘X’ are emergency tax codes, which may be assigned if you’ve switched jobs or transitioned from self-employment to working for an employer. While these tax codes are temporary, they do influence how much tax you pay while in effect.

To check if you’re owed money click here.