HMRC boost as brown envelopes containing £1,941 dropping on doormats

Keep an eye on your post this week as HMRC is sending out 'brown envelopes' that could potentially give you a cash boost of over £600. Life insurance broker LV has stated that these letters, containing crucial information about the tax you've paid in the previous year and how it was spent, will be sent out throughout the month.

Lilly Russell, an employee at The Times, expressed her surprise when she discovered she had overpaid her tax by £177 a month and received a refund of £1,941 following receipt of a brown HMRC envelope, reports the Express.

Alongside the brown envelope, you should also receive a P60 from your employer detailing your net and gross salary. It's vital to keep both documents and cross-reference them to ensure there are no discrepancies with your earnings that could cost you in the future or even result in a fine.

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If HMRC identifies that you have overpaid your tax, you could be eligible for an automatic repayment. For instance, if you started a new job or were only employed for part of the year, you may have been put on an emergency tax code at some point and overpaid tax.

If this is the case, you could be due a refund, which will be outlined in the letter within the brown envelope. A survey by Canada Life revealed that the average payout to those who overpaid tax was £689.

The unfortunate news could mean that you've underpaid your tax for the previous year, potentially leaving you with a bill of £783. If you're certain after thorough checks that your tax code aligns with your P60, then settling the amount is unavoidable.

LV's Gillian Wrigley advised: "If you don't have the money to hand, explain that and they should devise a doable payment plan. 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 crucial to verify the authenticity of any correspondence. With the prevalence of scams exploiting HMRC's name, particularly at this time of year, it's recommended to directly contact HMRC on 0300 200 3300 if there's any suspicion, rather than using details provided in the letter which could be part of a scam.