PAYE is tax withheld at source from employment and pension income. Typically, taxpayers who are due a repayment will receive a P800 tax calculation letter following the end of the tax year advising them of the refund due. Since 31 May 2024, HMRC no longer issues PAYE refunds automatically and taxpayers must claim any repayment due to them:

• on the HMRC app;
• via the online bank transfer service; 
• through their personal tax account; or
• by requesting a cheque.

Taxpayers should check they agree with the P800 calculation and that no data is missing before claiming their refund. HMRC says that the quickest and easiest way to check and claim a refund is through the HMRC app. If using other routes, the taxpayer may need their P800 reference number from their most recent tax calculation and their national insurance number in order to submit their claim.

Why is a refund due?

There doesn’t need to have been a payroll error for a repayment to be due. It is usually due to an incorrect or outdated tax code or the taxpayer not having been allocated the full personal allowance for the year. Common reasons for a repayment occurring are that:

• the individual did not work for the full tax year;
• the individual changed jobs or working hours during the year; or
• the pensioner had an incorrect amount of state pension included in their tax code.

Lead times for online repayments are approximately five working days and up to six weeks for repayment by cheque.

In some rarer and more complex cases, especially those which span multiple tax years, HMRC may still issue a repayment by cheque at its discretion.

Employers’ role

Employers cannot claim P800 refunds on behalf of their employees. The P800 reconciliation occurs after the end of the tax year once the payroll is finalised. However, HMRC’s February 2026 Employer’s Bulletin asks employers to encourage their employees to check whether they are due a refund and to submit a claim. Several employees, who do not have other sources of income, may not have realised that it is their personal responsibility to make this claim.