Why your tax computation may be wrong
Where your main income is taxed under PAYE, you may not be asked to complete a tax return each year. Instead, the HMRC computer automatically compares all the reports of your income made by employers and banks, and if you have under or over-paid tax for the year the computer issues a tax computation on a form P800.
Interest paid by banks and building societies has been paid without tax deducted since 6 April 2016. If you received interest with tax deducted in 2015/16, the same amount of interest, including the same amount of tax deducted, may have been carried over to your 2016/17 tax computation. This fictional tax, which the computer has assumed was deducted from interest in 2016/17, may be shown as being repayable to you.
This faulty tax calculation needs to be corrected. A tax repayment received in error is treated as seriously as a deliberate tax underpayment, and it can result in penalties. We can help check any P800 tax computation you receive.