HMRC brown letter arriving on your doormat could cost you £783 or even more

Image: peter dazeley)

Brits have been warned about a letter from HMRC due to arrive through letterboxes this week.

The brown envelopes demand an average sum of £783 from those taxpayers who owe money, but the figure could be much higher for some. May is when thousands get their dreaded letters as His Majesty's Revenue and Customs works out who has been underpaid or overpaid over the last tax year, and could either be owed, or themselves owe money to the taxman.

Experts have now urged people to make sure they have their P60s to hand - the documents from your employer show how much tax you've paid from your salary, and what it's been spent on. Cross checking the two can ensure there aren't any discrepancies with your earnings, and not doing so could be costly and even lead to a fine.

If HMRC works out you didn't pay enough tax, either through switching jobs or not declaring gains such as through side hustles or savings interest, then they could demand a repayment. Average underpayments of tax are £783 for those who owe money, according to a Canada Life survey.

Once you've checked and made sure your tax code is correct and matches your P60, then you'll need to declare any earnings missed out. Those who don't could face late repayment fines or even get jail time.

If the money is too much for you to pay in lump sum however, Brits can opt for staggering it through a repayment plan. Gillian Wrigley, from LV, said while "everyone dreads" the brown envelopes, they can also bear good news.

"If you don't have the money to hand, explain that and they should devise a doable payment plan," said Gillian. "It might seem hard to believe, but HMRC is staffed by humans, and if there IS a problem and you contact them straightaway, they will usually be helpful."

It's also a good idea to check if the letter is genuine. There are a lot of scams which piggyback off HMRC's name especially at this time of year, so if in doubt contact them directly through the number on the government website - do not use any contact details on the letter to be sure.

HMRC is very unlikely to text you, so again if you've received an SMS with HMRC information, call them on the above number instead of clicking links in the text.