HMRC is reviewing around 45 million PAYE accounts to identify people who have paid too much or too little income tax, with P800 tax calculation letters already being issued and checks continuing until November 2026.
The exercise is the tax authority’s annual PAYE reconciliation, which matches the tax actually deducted from pay over the year against what each employee should have paid. Overpayments are being prioritised, meaning workers who are owed money will be contacted first.
Being told a refund is due, however, does not necessarily mean the money will arrive on its own. HMRC has changed the process for most workers claiming refunds that cover multiple years, and once a claim has been processed they now need to actively request their repayment. The change matters because the money left on the table is already substantial: more than 730,000 tax refunds went unclaimed last year, at an average of £855 each.
The timetable is worth noting for anyone who has not yet heard anything. HMRC’s guidance says tax calculation letters are sent out between June and March of the following tax year, so silence in August is not evidence that a PAYE record is correct.
Why umbrella workers are more exposed
The UK’s estimated 700,000 umbrella workers have particular reason to pay attention. They are taxed through PAYE in the same way as other employees, but they move between assignments and may switch umbrella companies or other PAYE employers more frequently, which makes keeping track of tax codes and HMRC records harder.
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