Mistake 1 — Wrong tax code applied for part of the year
The P60 only shows the tax code in force on 5 April. If your code changed mid-year — and tax codes change for nearly half of UK employees in any given year — there's no easy way to spot whether the right code was applied for the right months. Common triggers: a benefit-in-kind starting or stopping, marriage allowance being applied or withdrawn, a Budget change moving thresholds, or HMRC correcting a previous mis-coding.
The defensive check: the total tax figure on the P60 should be roughly what the tax calculator says it should be for that gross income, with the average tax code over the year. If the variance is more than a few hundred pounds and you can't explain it with benefits-in-kind, dig further. The tax code decoder explains every code. The "why is my tax code BR?" explainer covers the most common over-deduction case.
Typical recovery: £150–£800 for a single-year correction. HMRC reconciles automatically via P800 in most cases, but the reconciliation can miss situations where multiple jobs or pensions overlap.
Mistake 2 — Pension contributions not reflected in taxable pay
If you make pension contributions via salary sacrifice, the gross pay on your P60 should be the post-sacrifice figure. If you make contributions via "relief at source" (most personal pensions, including SIPPs), the gross pay should be the full salary and you claim higher-rate relief separately via Self Assessment.
The mistake: payroll occasionally codes a personal pension as if it were salary sacrifice (or vice versa). Effect: either you've paid tax on income that should have been pre-tax, or you're claiming higher-rate relief you've already had at source. Both are correctable but only if you spot the discrepancy.
Check: compare your pension provider's annual statement of contributions against the "pension contributions" line on your March payslip. If they don't match, ask payroll which scheme type they were running.
Typical recovery: £200–£2,000 depending on income and contribution size.
Mistake 3 — Previous employment figure missing or wrong
If you changed jobs during the year, your final employer should show "previous employment" pay and tax in a separate row on the P60, taken from the P45 you handed in when you joined. If that row is blank but you definitely had a previous job, the P45 was never processed.
Effect: your final employer applied a non-cumulative or emergency tax code throughout your employment, so you've over-paid PAYE. The over-payment usually comes back via P800 in the summer, but only if HMRC's RTI feed has both employers' figures — which it sometimes doesn't if the previous employer ran a delayed final submission.
The fix: contact HMRC directly with both P60s (or the P45 plus the new P60) and ask them to reconcile. The Personal Tax Account is the easiest channel.
Typical recovery: £500–£3,000 — this can be one of the larger refunds because emergency-coded employment can deduct 1.5×–2× the correct tax for several months.
Mistake 4 — Student loan over-collection on irregular pay
Student loan repayments on PAYE are a percentage of pay above the plan's threshold, calculated per pay period not annually. So a one-off bonus or commission payment that pushes a single month's gross pay through a high band triggers a one-off student loan deduction that is way out of proportion to the annual position. Unlike income tax, this does not automatically reconcile at year-end — student loan over-payments via PAYE are not refunded automatically.
Check: if your P60 shows total student loan deductions but your annual gross pay was less than expected for the year (e.g. you had a quiet second half), you may have repaid more than required. The student loan calculator shows the annualised correct figure for each plan.
To claim back: contact the Student Loans Company directly (not HMRC) with your P60 and ask for a refund of the over-collection.
Typical recovery: £100–£600.
Mistake 5 — P11D benefits collected through tax code, but the cash equivalent changed
Benefits in kind (company car, private medical, etc.) are usually collected via your tax code: HMRC reduces your personal allowance by the cash-equivalent figure from your P11D, so you pay 20%/40%/45% of that figure as additional tax via slightly more PAYE deductions each month.
The mistake: your benefits change during the year (new car, dropped medical insurance, started gym membership) but HMRC's tax code still reflects last year's figures. Net result: you under- or over-pay tax on the benefits, with the correction landing in next year's reconciliation 12+ months later.
Check: when you receive your P11D in July, compare the figures to what's on your latest tax code notice (the "P2"). If the P11D shows a lower benefit than the tax code is collecting tax on, you're over-paying right now and can ask HMRC to update the code in-year.
Typical recovery: £50–£400 per year, but compounds if the discrepancy persists for multiple years.
The 30-minute audit, in order
- Pull the P60. Check the gross pay matches your March payslip's YTD figure.
- Check the tax code. Decode it via the tax code decoder.
- Run your gross figure through the tax calculator. If the calculator's tax figure is within £100 of your P60's tax figure, the headline numbers are clean.
- If you had benefits in kind last year, find your P11D. Cross-check the benefit figures against this year's tax code (P2 notice).
- If you changed jobs during the year, confirm "previous employment" is filled in.
- If you had a one-off bonus, check your March payslip for the student loan deduction line — was it disproportionate?
- If you spot anything off, log into Personal Tax Account and check whether HMRC's view of your year matches the P60. They should match exactly.
Sources
HMRC: Check your Income Tax · Student loan over-payment refunds · Personal Tax Account.