The tax authority has reminded taxpayers to check their P800 letters

Almost 700,000 taxpayers across the UK are sitting on unclaimed refunds worth an average of £473 each, HM Revenue and Customs has confirmed.

The tax authority dispatched hundreds of thousands of P800 letters earlier this summer notifying recipients of money owed to them, yet a significant number have failed to act.

HMRC took to X to urge people to check whether they had overlooked the correspondence. "Remember getting a letter about a tax refund but didn't do anything about it?

"Last year, almost 700,000 people didn't claim back the money they're owed. Download the HMRC app to check," the department posted.

Roughly four million P800 notices were expected to be sent out over the summer period, with the final batch due to land by 30 November 2025.

Earlier this summer, HMRC disclosed that close to one million people had still not claimed their rebate.

The P800 Tax Calculation is a document HMRC sends to anyone it believes has paid either too much or too little tax.

It sets out precisely where the discrepancy arose and what steps the recipient should take, whether that means reclaiming an overpayment or settling an outstanding liability.

These notices are exclusively directed at people who are employed or drawing a pension. Those registered for Self Assessment have their bills adjusted automatically instead.

An HMRC spokesperson said: "We wrote to customers this summer to inform them they are due a refund, and need to claim it.

"Customers can follow the straightforward instructions in the letter, which explain how they can quickly and easily claim it online on GOV.UK or via the HMRC app."

The Gov.uk website also hosts a checker tool allowing individuals to verify whether they are entitled to a refund from previous tax years.

Tax overpayments usually happen when a person's circumstances change during the tax year but their tax code is not updated straight away.

This can happen if someone has more than one job, changes employers before their new workplace receives the correct tax information, or stops working part way through the year.

Overpayments can also occur if savings interest or certain benefits are taxed at the wrong rate.

Other common causes include paying too much tax on pension income, redundancy payments, foreign income for UK residents, or UK income for people living abroad. Payment protection insurance (PPI) payouts can also result in tax being overpaid.

One of the most common causes is an incorrect tax code. HMRC uses tax codes to determine how much tax should be deducted from a person's income based on their earnings and personal allowance.

The standard tax code, 1257L, gives most people with one job or one pension a £12,570 tax-free personal allowance before they start paying income tax.

Codes marked with 'W1', 'M1' or 'X' are emergency designations, often triggered by a job change or a move from self-employment into salaried work. Though temporary, they directly affect how much tax is deducted in the interim.

Those who cannot use digital services can reach HMRC on 0300 200 3300 or write to Pay As You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS.

In some cases, the letter will state that a cheque is being posted automatically, which should arrive within a fortnight of the date printed on the notice.

Crucially, refunds can be backdated up to four years, meaning anyone who received a P800 as far back as 2021 may still be eligible to reclaim their money.

With P800 correspondence continuing to arrive on doorsteps, specialists have raised the alarm about criminals seeking to exploit the situation.

Money-Saving Expert has warned that fraudsters may pose as HMRC and dangle refund offers through text messages, emails or telephone calls.

However, any such contact should be treated as a clear red flag. HMRC will only ever notify taxpayers of a refund by post, never electronically, even though the actual claims process can be completed online.

The tax authority will never ask for a payment or ring out of the blue to confirm bank account details.

Britons are reminded that the letters themselves "are genuine," but anyone contacted digitally or by phone purporting to be from HMRC should treat the approach with extreme suspicion and avoid sharing personal or financial information.