Payroll & employment
A P800 or simple assessment showing PAYE underpaid needs checking against your own records before you pay or dispute it.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
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QuickBooks PartnerCertified ProAdvisor100+ yearsCombined team experienceFully insuredUp to £2m indemnityCheck the letter, usually a P800 or simple assessment, against your own payslips and P60s before paying anything. If the figures reconcile, pay or arrange a coding adjustment; if they do not, contact HMRC or your accountant to query it, since payroll errors are a common cause.
Why underpayments arise
Responding to the letter
Check the letter, usually a P800 or simple assessment, against your own payslips and P60s before paying anything. If the figures reconcile, pay or arrange a coding adjustment; if they do not, contact HMRC or your accountant to query it, since payroll errors are a common cause.
The most frequent causes are a tax code that did not update in time after a change of income, benefits in kind reported late through a P11D that were not already reflected in the tax code, multiple sources of PAYE income each using part of the personal allowance incorrectly, or a payroll correction made after the year end.
For directors, a common trigger is dividends or other income pushing total earnings into a different band that PAYE alone could not capture, since PAYE only ever taxes the salary it is run on.
Compare the figures used by HMRC against your own P60, P45s and any P11D, since the letter shows HMRC's assumptions and these are sometimes based on estimated or duplicated employment records. Where the underpayment is confirmed correct, options usually include paying it directly, having it collected through next year's tax code, or agreeing a time to pay arrangement for a larger amount.
Where the calculation looks wrong, HMRC can be asked to review it, and supporting evidence such as payslips speeds this up considerably. Do not ignore the letter while a query is raised, since interest can still accrue on a confirmed liability.
Rates, thresholds and deadlines quoted here reflect the 2026/27 UK position and current Companies House and HMRC guidance. Check GOV.UK, or ask us, before relying on them for your own company.
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Frequently asked
Not exactly; it is a calculation, and a separate simple assessment or coding notice usually follows for how it is actually collected.
Yes, PAYE is designed around a single employment and can misjudge total tax where a director also has dividends or other income.
Yes, checking a P800 against payroll and Self Assessment records is straightforward for an accountant with access to both.
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No. This page explains general UK rules and common accounting treatment. Your facts, contracts and wider tax position must be reviewed before you rely on a conclusion.
Included approach
Check the current rules
Deadlines, thresholds and filing rules change. GOV.UK and Companies House publish the current statutory position; advice should then be applied to your company’s circumstances.
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