HMRC tax refunds: how do you claim a rebate?
6th Jan 2024 Managing your Money
3 min read
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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