What happens if I don’t agree with HMRC’s tax calculation?

What it means when you “don’t agree” with HMRC’s tax calculation

If you’ve received a tax calculation from HM Revenue & Customs (HMRC) and you don’t agree with it, you are not alone. A tax calculation can arrive as a P800 calculation (often for PAYE taxpayers), a Simple Assessment, a Self Assessment calculation after you file your return, or a calculation produced after HMRC has amended your return or made a decision about your tax position. Whatever form it takes, the key point is this: you usually have options. Those options depend on what kind of calculation it is, why you disagree, and where you are in the process (for example, whether the figure is only an estimate, a final assessment, or the result of an enquiry or compliance check).

Disagreeing with a tax calculation doesn’t automatically mean you’ve done something wrong, or that HMRC has. Many disputes are simply about missing information, incorrect pay and tax figures supplied by an employer or pension provider, a mismatch between what was reported and what was actually received, or the timing of income, reliefs, and deductions. Sometimes the disagreement is about interpretation of the rules, whether an expense is allowable, whether you’re entitled to a relief, or which year an amount should fall into. The right next step is to identify the type of calculation you received and the specific reason you think it is incorrect.

Common reasons HMRC’s tax calculation can be wrong (or look wrong)

Before you challenge a calculation, it helps to understand the most frequent causes of disagreement. Some of these issues are genuine errors; others are misunderstandings that are easy to clear up once you see how HMRC reached the figure.

Incorrect PAYE income or tax details

For many people, the data HMRC uses comes from PAYE submissions made by employers, pension providers, or the Department for Work and Pensions. If your employer submitted the wrong pay figure, used an incorrect tax code, reported you as having multiple employments incorrectly, or corrected something late in the tax year, your calculation can be thrown off. Even a small discrepancy can change whether you owe tax or are due a refund.

Benefits in kind not included (or included twice)

Company cars, private medical insurance, and other benefits in kind can affect your tax. If a P11D is wrong or processed twice, your calculation can be inflated. Conversely, if a benefit was omitted, HMRC’s calculation may show too little tax due and then later be corrected, which can feel like a surprise.

Reliefs, allowances, or deductions missing

You might be entitled to reliefs such as pension contributions (depending on how they are paid), Gift Aid donations, marriage allowance adjustments, or certain employment expenses. If these aren’t included, HMRC’s calculation may be higher than it should be. Similarly, if you are due a personal allowance but HMRC restricted it because they believed you had higher income, the calculation can look wrong.

Untaxed income not captured correctly

Interest, dividends, rental income, and other untaxed income can be underestimated or overestimated, especially if figures were estimated or based on incomplete information. If HMRC believes you received income you did not actually receive, or attributes it to the wrong year, the tax calculation may not match your records.

Timing differences and year-end adjustments

Sometimes you disagree because the calculation reflects the tax year rules and timing rather than your monthly pay. For example, if you changed jobs, had a bonus, or had a tax code change, the PAYE system may collect tax unevenly across the year. HMRC’s year-end calculation can still be right even if individual months looked odd.

Calculation is correct but the payment method is confusing

In PAYE scenarios, HMRC can collect underpaid tax through a tax code adjustment in a later year, rather than demanding a lump sum immediately. A calculation can show “you owe X,” but you might not need to pay it directly if it will be coded out (subject to eligibility rules). If you assume you must pay immediately, it can feel like the calculation is wrong when it’s really the collection method that needs clarification.

First step: identify what kind of calculation you received

How you challenge HMRC depends heavily on the document you received and the legal basis for it. In broad terms, it may be one of the following.

P800 tax calculation (PAYE)

A P800 is typically issued when HMRC reviews your PAYE record and concludes you have paid too much or too little tax in a tax year. This is common if you had more than one job, changed jobs, received a pension, had benefits, or had a tax code issue. It is not exactly the same as a Self Assessment calculation, and the way you dispute it is usually by checking the underlying figures and contacting HMRC to correct the record.

Simple Assessment

A Simple Assessment is used when HMRC believes you owe tax but you are not within Self Assessment. It results in a formal demand. If you disagree, you generally have the right to challenge it, and the timeframe and process can matter. It can include things like underpaid PAYE tax that can’t be collected through coding, or tax due on certain income where HMRC believes Self Assessment is not required.

Self Assessment calculation after you file

If you file a Self Assessment return, the calculation is based on your return entries (and sometimes HMRC adjustments or corrections). If you disagree, you may need to amend your return, or you may need to appeal if HMRC has amended it or issued an assessment you think is wrong.

HMRC amendment, assessment, or decision following an enquiry

If HMRC has opened an enquiry or compliance check and then issued amendments, closure notices, or assessments, the dispute route can involve formal appeal rights, review options, and tribunal procedures. This is more serious than a routine mismatch, and deadlines can be critical.

Check the figures and assemble your evidence

Whether you’re dealing with PAYE or Self Assessment, a successful challenge usually starts with evidence. This doesn’t need to be complicated. The goal is to identify exactly which figure is wrong and what the correct figure should be.

Useful documents to gather

Depending on your situation, the following items are commonly relevant:

- P60 (end-of-year certificate from an employer)

- P45 (from a job you left during the year)

- Payslips, especially the final payslip for the tax year

- Pension statements and P60 equivalents for pensions

- P11D (benefits in kind) and any supporting benefit statements

- Bank interest certificates or statements showing interest received

- Dividend vouchers (if applicable)

- Rental income and expense records (for property)

- Gift Aid donation summaries from charities

- Pension contribution records (and whether relief is at source or via salary sacrifice)

- Letters or messages from HMRC showing coding notices (P2) and changes

Compare HMRC’s numbers line by line

When you receive a calculation, look for the sections that show pay, tax deducted, benefits, allowances, and any untaxed income. Compare these with your documents. If one employment is missing, duplicated, or has the wrong tax deducted, you’ve likely found the reason for the disagreement. If the figures match but the final amount still feels wrong, the issue may be the tax code, allowance restriction, or a rule about how a relief is given.

What to do if you disagree with a P800 (PAYE) calculation

If the calculation is a P800 and you think it’s wrong, your most practical route is usually to contact HMRC, explain what is incorrect, and provide the correct figures supported by documents. P800 disputes often come down to correcting the PAYE record rather than a formal appeal route (though specific situations can differ).

Typical actions for a P800 dispute

1) Identify the incorrect item (for example, employer pay, tax deducted, benefits, or estimated income).

2) Gather proof (such as your P60, payslips, P11D, or pension statements).

3) Contact HMRC with the details and ask them to update your record and reissue the calculation if needed.

4) Keep a note of the date you called, what was said, and any reference numbers.

When the issue is your employer or pension provider

If HMRC’s figures are wrong because your employer or pension provider submitted incorrect data, HMRC may tell you that the employer must correct their submission. In practice, you may need to contact payroll or the provider to request a correction, then follow up with HMRC after the data is updated. This can be frustrating, but it’s often the fastest route because HMRC will rely on Real Time Information submissions for PAYE pay and tax.

What if HMRC insists the P800 is correct?

If HMRC says the calculation is correct, ask them to explain the key components: the income figures used, the allowances applied, any restriction of personal allowance, and how the underpayment or overpayment arose. Sometimes, the disagreement is actually about a different year, a duplicated employment record, or a code adjustment being applied later. If you still believe the record is wrong, you can ask what evidence would change their view, and provide it in writing so there’s a clear trail.

What to do if you disagree with a Simple Assessment

A Simple Assessment is more formal than a general PAYE reconciliation, because it is a legal demand for tax. If you think it is wrong, you should take it seriously and act promptly. The dispute route often includes asking HMRC to correct it or making a formal challenge where appropriate. The exact approach depends on why you disagree: a factual error (wrong income figure) may be resolved by correction, whereas a dispute about liability may require a formal appeal approach.

Act quickly and don’t ignore the payment request

Even if you disagree, ignoring the assessment can lead to debt collection steps, interest, and potentially enforcement action. If you are confident the amount is wrong, contact HMRC immediately, explain the dispute, and ask what happens to payment obligations while it is being reviewed. In some cases, you may be able to request a hold on collection while the matter is checked, but you should not assume this is automatic.

Provide a clear explanation and the correct figures

When challenging a Simple Assessment, it helps to be direct and structured. State what the assessment says, which figures you disagree with, what you believe the correct figures are, and what evidence supports your position. If the dispute is about entitlement to an allowance or relief, explain why you believe you qualify and include any relevant documentation.

What to do if you disagree with a Self Assessment calculation

If you are within Self Assessment, there are two broad scenarios: either (a) the calculation is based on what you filed and you now think your return was wrong, or (b) HMRC has changed your return or issued an assessment you disagree with.

If your return is wrong: amend it (if you can)

If the issue is simply that you made a mistake—entered the wrong figure, omitted income, claimed the wrong relief, or misunderstood something—you may be able to amend your return within the permitted amendment window. Amending can be much simpler than arguing about a calculation derived from an incorrect return.

When you amend, make sure you keep notes about what you changed and why. If you are correcting a mistake that reduces the tax due, be prepared to provide evidence if HMRC asks. If the correction increases the tax due, you may need to pay the additional amount and possibly interest, depending on timing.

If HMRC changed the figures: consider an appeal or review route

If HMRC has amended your return or issued an assessment you believe is wrong, you may have formal rights to challenge it. This can involve a written appeal, requesting an internal review, and if necessary taking the matter to an independent tribunal. Deadlines can be strict, and missing them can limit your options. If the amounts are material or the issue is complex, it may be sensible to get professional help from a tax adviser.

Understanding “appeal,” “complaint,” and “correction”: they are not the same

One of the biggest sources of confusion is choosing the wrong route. People often say “I want to appeal” when what they really need is a correction of a record, or they file a complaint when they actually need to use a formal appeal process. Here’s how to think about it:

Correction

A correction is about fixing a factual mistake in the information HMRC is using, or correcting your own filed data (such as by amending a return). It’s usually the first step if figures are wrong.

Appeal

An appeal is a formal challenge to a decision or assessment. It’s used when HMRC has issued something that has legal effect (for example, an assessment, amendment, penalty, or decision) and you believe it is wrong. Appeals have time limits and formalities.

Complaint

A complaint is about HMRC’s service, behaviour, delay, errors in handling your case, or failure to follow process. A complaint might be appropriate if HMRC repeatedly fails to act on evidence or causes unreasonable delay, but a complaint does not normally replace the legal route to challenge the tax itself.

Deadlines matter: why delaying can cost you

If you don’t agree with HMRC’s tax calculation, it can be tempting to put it aside until you have time. That is risky. Many tax processes have strict deadlines, and even where there is flexibility, delay can create practical problems, including escalating collection actions or interest on unpaid tax.

Even when you are confident the calculation is wrong, it is wise to respond promptly, set out your disagreement clearly, and ask what will happen next. If you need more time to gather documents, you can still notify HMRC that you dispute the calculation and will provide evidence shortly. What you want to avoid is silence, because silence is often treated as acceptance in practice, even if not formally.

What happens if you simply don’t pay?

If HMRC believes you owe tax and you do not pay by the due date, several things can happen. The precise sequence can depend on the type of tax, the amount, and your circumstances, but the broad risks are similar.

Interest and potential penalties

Unpaid tax can attract interest. Depending on the situation, penalties may also arise, particularly if the unpaid amount relates to a return that was incorrect due to careless or deliberate behaviour, or if you fail to meet filing and payment deadlines in Self Assessment. Not every dispute leads to penalties, but ignoring the demand is the part that tends to make matters worse.

Debt collection steps

HMRC can take steps to collect debts, including issuing payment reminders and escalating to more formal recovery actions. If you have the funds but are disputing the amount, it may still be worth discussing payment arrangements or a temporary hold while the dispute is reviewed, rather than simply not paying.

Impact on future tax codes or refunds

In PAYE cases, HMRC may attempt to collect certain underpayments through your tax code in a later year (where allowed). If you later become due a refund, HMRC can offset it against an outstanding debt. This can be surprising if you were expecting a repayment and it is used to clear a previous amount HMRC believes is owed.

Practical tips for communicating with HMRC effectively

Whether you contact HMRC by phone, online message, or letter, the way you present your disagreement can make the outcome faster and less stressful.

Be specific, not general

Saying “your calculation is wrong” is less helpful than saying “the employment income figure from ABC Ltd is shown as £42,000 but my P60 shows £38,500, and tax deducted is shown as £6,000 but my final payslip shows £5,210.” HMRC staff are far more likely to resolve the issue quickly if you pinpoint exactly what needs correcting.

Use a simple structure

A good message often follows this pattern:

- What you received (type of calculation and year)

- What you disagree with (the exact line items)

- What the correct figures are

- What evidence supports your figures

- What you want HMRC to do (update record, reissue calculation, correct assessment, explain rationale)

Keep a record of everything

Keep copies of letters and screenshots of online messages. If you speak on the phone, write down the date, the name (or identifier) of the person you spoke to, and what they advised. This helps if the matter drags on or if you need to escalate.

Be cautious with assumptions

Sometimes the calculation appears wrong because it includes items you forgot about, such as a short-lived second job, taxable benefits, or a pension lump sum. Before you challenge, ensure you are looking at the right tax year and that you have accounted for all sources of income. A calm “help me understand this figure” approach can be more productive than going straight to accusation.

If the disagreement is about a rule, not a figure

Not all disputes are about missing or incorrect numbers. Some are about interpretation: whether something is taxable, whether an expense is allowable, whether you are resident, whether income is trading or employment income, or whether a relief applies. These cases can be more complex because they involve legal tests and facts that need to be evidenced.

Examples of rule-based disagreements

- You claimed travel and subsistence expenses and HMRC says they are not allowable

- You believe you qualify for a relief and HMRC says you do not

- HMRC treats income as self-employment but you believe it is employment (or vice versa)

- There is a dispute about whether you are UK resident for tax purposes

- You have foreign income and disagree with how it has been taxed

How to approach a rule-based dispute

Start by outlining the facts clearly. What happened, when, and what the amounts were. Then set out your interpretation and why. Include supporting documents that demonstrate the facts: contracts, invoices, bank statements, travel logs, correspondence, or residency evidence. If the issue is technical, professional advice can be worthwhile because getting the classification wrong can have knock-on effects beyond the one calculation you received.

When you should consider professional help

Many disagreements can be resolved with a straightforward correction. However, there are situations where paying for advice can save money, time, and risk.

Signs you might need a tax adviser

- The amounts involved are significant or the dispute spans multiple years

- HMRC has opened an enquiry or is asking detailed questions

- You are facing penalties and the behaviour categorisation matters

- The dispute involves residency, foreign income, or complex reliefs

- You are unsure whether to amend a return or appeal a decision

- You need to negotiate time to pay arrangements while disputing the amount

Choosing the right kind of help

For straightforward PAYE problems, you may not need a specialist. For Self Assessment and complex issues, a chartered tax adviser or accountant with tax expertise can be useful. If a dispute is heading toward tribunal, you may want someone experienced in tax disputes and litigation support. Keep in mind that the best adviser is one who will focus on evidence and process as much as the numbers.

How to reduce the chance of this happening again

Once your dispute is resolved, it’s worth taking steps to reduce the risk of repeat problems. This is especially relevant if your income sources are complicated or change frequently.

Check your tax code notices

Many PAYE issues start with an incorrect tax code that goes unnoticed. Reviewing tax code notices and querying unexpected changes can prevent large year-end underpayments.

Keep your personal details and income sources up to date

Make sure HMRC has your current address and that your employment and pension records are accurate. If you start or stop a job, check that your records reflect it. If you have multiple employments, ensure the correct job has your personal allowance (where appropriate).

Maintain good records for untaxed income

If you have interest, dividends, or rental income, keep clear records and reconcile them annually. This helps you spot mismatches early and prevents HMRC from relying on estimates that might be wrong.

Review your position during the year

If you know you will have a change—such as a bonus, a new benefit, or starting a second job—consider checking your tax code and estimated income partway through the year. Catching issues early can prevent an unpleasant year-end surprise.

What to expect after you challenge HMRC’s calculation

After you raise your disagreement, the timeline and outcome depend on the complexity. In simple cases, HMRC may correct the record and issue an updated calculation quickly. In other cases, they may ask for documents, request that a third party (like an employer) correct their submissions, or refer the matter to a specialist team.

Be prepared for back-and-forth communication. If you provide clear evidence, most factual disputes can be resolved. If the dispute is legal or interpretive, you may receive a written explanation of HMRC’s position. If you still disagree, your next steps may involve more formal procedures, and it becomes especially important to observe deadlines and keep thorough records.

A sensible path forward if you don’t agree

If you’ve received a tax calculation from HMRC and you don’t agree with it, the most effective approach is usually calm, structured, and evidence-driven:

1) Identify the type of calculation and the tax year involved.

2) Compare HMRC’s figures to your documents and pinpoint the exact discrepancy.

3) Gather evidence (P60s, payslips, P11Ds, bank statements, donation records, and so on).

4) Contact HMRC with a clear explanation and request a correction or formal review route as appropriate.

5) Do not ignore payment demands; discuss collection holds or arrangements if needed while the dispute is investigated.

6) Escalate to an appeal or complaint route only when it matches the problem you are trying to solve.

7) Consider professional advice when the issue is complex, high value, or involves penalties.

Disagreeing with HMRC’s tax calculation can feel intimidating, but it is usually manageable if you break it down into specifics: which figure, which document, which rule, and which year. The more precisely you can show what is wrong and what is correct, the more likely you are to get a fair and timely resolution.