Dotting i’s and crossing t’s

HMRC begin PAYE reconciliation

HMRC has begun its annual PAYE End of Year Reconciliation process to check that people have paid the right amount of tax in the last tax year, 2014/15. This has been a key feature of the PAYE system since it was introduced over 70 years ago, although the process hasn’t always run smoothly

The Revenue will be sending tax calculations (P800’s) that show an overpayment of tax first, followed by a cheque around a fortnight later. Taxpayer’s won’t need to do anything.

The whole process should be completed in October.

This automated process ensures those who have had a change in circumstances during the last tax year that was not captured in their tax code have paid no more or less than they should. Any discrepancy could be because a person had:

• changed jobs;
• more than one job for a time;
• a change of company car; or
• received investment income that was not reported during the year.

The vast majority of PAYE taxpayers will have paid the right amount of tax for the year and will not be contacted by HMRC.