3 common letters from HMRC
Some people feel a bit nervous when they get a letter from us, but every letter we send is just to give you information, so there’s no need to feel alarmed.
The 3 most common letters we send are:
a P2 Tax Coding Notice letter
a P800 tax calculation letter
a PA302 Simple Assessment letter
On this page, we’ll look at why you would get each one of these and what, if anything, you need to do.
P2 Tax Coding Notice
Showing how we work out your tax code
Your tax code is a mix of numbers and letters based on your personal circumstances. We share it with your employer, and it tells them how much tax to deduct from what you’ve earned, before they pay you.
A P2 Tax Coding Notice is simply the document that lets you know what your tax code is and how we worked it out.
It shows your tax-free Personal Allowance (this is the amount of income you can get before you start paying tax) – you can learn more about your Personal Allowance on this page. It’ll also show anything else that could reduce your Personal Allowance, like having a company car.
A P2 means you’ll always be able to see how your tax code is worked out, so you’re not left guessing and can spot if anything needs updating.
You can find out more on our Understanding your tax code page.
What to do when your P2 arrives
You’ll get a P2 if there’s been a change to your tax code. Checking your P2 is very important, as having the right tax code helps to stop you paying too much tax – or too little (which can lead to a surprise bill).
Helpful tip:
Taking the time to do this means the right amount of tax comes out of your pay. Nothing more and nothing less.
When your P2 arrives, check:
your income is correct
any taxable company benefits you get are listed (you can find a list of these on GOV.UK)
the tax year at the top of the letter and let your employer know (if it’s for the current tax year, it will affect your next payslip. If it’s for the next tax year, it’ll affect your payslip from 6 April)
If anything doesn’t look right, you can let us know online on GOV.UK and we can review your code.
Key thing to remember:
Your employer’s role is simply to use the code we send them. Making sure it’s right is up to you.
P800 tax calculation letter
Checking you’ve paid the right tax
At the end of every tax year, we look at your final income and the tax you’ve paid, to check that the right amount has been collected. If we find a difference between what you paid and what you owed, we’ll send you a P800 tax calculation letter.
This is a routine review we do for everyone, and it’s not a sign that you’ve done anything wrong.
At the start of each tax year, we work out your tax code as accurately as we can based on what we know about you (this is what we send in your P2 letter). But, if your circumstances change (which is a normal thing to happen – for example, if your pension contributions change) and we don’t know about it, it may mean that your tax code isn’t quite right.
Your P800 will either show you’ve paid too much tax and need a refund, or you’ve paid too little and need to pay what you owe.
Helpful tip:
It’s common to receive a P800 in a year when your income changes, especially if you get a new job.
Once that tax year ends, P800s are usually sent out between June and March.
What to do when your P800 arrives
Your tax calculation letter will show:
- your taxable income
- the tax you’ve already paid
- the amount of any tax you owe
- the amount of any tax you’ve overpaid
If your P800 shows you’re owed a refund, the letter will tell you how to claim it.
If your P800 shows you owe tax, then we’ll usually change your tax code for the following year so we can collect the money that way. We’ll explain how this works in the letter itself, so you know what to expect.
Here’s an example.
Jose owes us £300 in tax.
We change his tax code for the next tax year.
This means we’ll collect an extra £25 each month, to cover what he owed.
Helpful tip:
If you get a P800 and think any of the figures look wrong, you can always get in touch with us online (GOV.UK). We’ll review the calculation to double check it’s correct.
PA302 Simple Assessment letter
Collecting tax underpayments another way
We send a PA302 Simple Assessment letter when we can’t collect the tax you owe in the usual way (like through your payslips). You’ll get a Simple Assessment if you owe more than £3,000, or if your State Pension is your only income and it’s more than your Personal Allowance (as this means you may owe tax on your State Pension). Learn more about your Personal Allowance and how the State Pension is taxed on this page.
With Simple Assessment, we do all the number work for you and send you the result – it’s made to make life easier for people with straightforward tax situations.
What to do when your PA302 arrives?
Your Simple Assessment letter will show:
- your taxable income
- the tax you’ve already paid
- the amount of tax you owe
- when that amount is due
It’s always worth double checking these figures against your own records (you’ll find the information you need on things like your P60, bank statements or any letters from the Department for Work and Pensions).
If anything doesn’t look right, you have 60 days from the date of the letter to let us know. We can then review the calculation and get back to you.
Key thing to remember:
If you’re registered for Self Assessment, you won’t receive a Simple Assessment as your tax is handled a bit differently.
You can find out more details about how it works on our Simple Assessment page.
Prefer to go paperless?
Instead of getting letters, you can choose to be sent emails or app notifications instead.
Just sign in to your Personal Tax Account on GOV.UK or download our app to change your contact preferences. You can then check your tax code, see your tax calculations and check what you owe at any time.
We’re here to help
There’s no need to panic when you get a letter from us. We know that tax can be a bit confusing and that most people just want to do the right thing – so we’re here to help you do that.
For more details on what we’ve talked about on this page, check out these links: