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HMRC tax refunds: how do you claim a rebate?

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HMRC tax refunds: how do you claim a rebate?
There are many tax refundsand allowances for UK workers, depending on their employment status and personal circumstances. While you may be automatically given a tax rebate, you may also be eligible for some refunds you aren’t aware of.
In this article, we cover what you need to know about getting a tax refund from HMRC.

What is a tax refund? 

If you’ve paid too much tax on your personal income or are eligible for tax benefits that can be refunded, you may be able to get a tax refund or rebate to get some of your money back.  
Although the tax system can be efficient, there are occasions when errors occur, and tax refunds are necessary.
So, it’s vital you understand your tax situation to ensure you’re not paying more than you need to.
If you do think you have overpaid tax, and haven’t received an automatic rebate, there is a process in place to help you get your money back.  

How your tax obligation is calculated 

The most common reason for a tax rebate is that you have paid too much income tax.
If you earn more than the personal tax-free allowance of £12,570, you start paying income tax, although it’s not just employment income that counts as personal income.
For example, pension payments, income from life annuities and interest on investments are considered ‘earned income.’
So even if you don’t earn a large salary, other sources of income can push you into higher tax bands.
As various sources of personal income are eligible, HMRC relies on employers to give an accurate tax code and depends on you to fill in a declaration form to work out how much tax you should pay.
But miscalculations can happen, so it’s worth keeping a close eye on your tax code, especially if you’ve changed jobs recently.  

What you can get a tax refund on

You can get a refund on any taxable income you’ve paid taxes on.
This includes (but is not limited to) pay from any jobs, pension payments, a self-assessment tax return, interest from savings, foreign income, UK income if you live abroad and even a redundancy payment.
You may even be able to get a refund on taxable income you’ve paid taxes on, such as job expenses. 
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Am I eligible for a tax refund?  

If you’ve overpaid any tax or have yet to claim certain tax refunds, such as a uniform tax refund, you’re likely eligible for a tax rebate. 
To get a refund on any overpaid taxes, you can claim in arrears of up to four years and notify HMRC of your allowance in advance to update your tax code for future earnings. 
You may also be eligible for specific refunds depending on your employment status, but you may need to ask for a rebate yourself.
From certain travel and accommodation costs to professional membership fees, you may be eligible to claim tax relief for certain job expenses.  
You can check the government website for more information.  

How do I claim a tax rebate? 

If you have received a tax calculation letter, also known as a P800, letting you know you are due a tax rebate, you can claim this online.
The Government Gateway site will ask a few questions to check your eligibility before you can apply.
You’ll then be able to access information about your tax and track your rebate progress online.
If you don’t have a Government Gateway account, you’ll need to create one. If you’d prefer to call, there is a helpline on the GOV.UK website, which includes a postal address, too.   
Self-employed? You can complete an annual self-assessment form, so HMRC can process any refund due.  
Even if you haven’t received a P800, you can still claim a tax refund by contacting HMRC.

How much money will I get back? 

Your tax refund is based on many factors, such as how much you earn, whether you work from home and if you’ve paid any expenses for equipment, vehicles or services due to your job.  
Some allowances depend on your income tax rate and how much you have spent.
For example, if you were to spend £50 per year on cleaning your work uniform and are a basic rate taxpayer, then you would be entitled to claim a tax rebate of 20% of this, or £10. 

When do I get my tax refund? 

You should get a P800 at the end of the tax year, which will inform you of any refunds.
These are sent automatically within five working days, but you could also receive a cheque within 14 days, although it can take longer.
If you are expecting a refund that covers more than one tax year, you should receive one cheque. 
The process may take longer if you have made a query relating to your self-assessment.
Also, the amount of time you should expect to hear back on your query can vary depending on your circumstances and your enquiry.
You can track your tax refund online. The tax system can be complex, but with the help of financial advice, you could get help claiming back refunds of sometimes hundreds of pounds.
Unbiased can connect you to a local and qualified accountant to help you find out whether you’re eligible for a refund or any tax relief.
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