Can I claim a tax rebate?

If you think you may have paid too much tax then you could be entitled to a rebate. However, don’t simply sit and wait for HMRC to pop a cheque in the post to you – you’ll need to be pro-active to make sure you get the rebate you are due.

If your tax has been over-calculated and you are on PAYE then HMRC may well be able to sort out the situation without the need for you to intervene. However, if you provide self-assessment returns and suspect that you may have over-paid, you will need to contact HMRC direct and put in a claim for a rebate.

Can I get a tax rebate?

You may be able to get some money back on your tax bill if:

  • You are employed and had too much tax taken from your pay (for example, by being on an incorrect tax code)
  • You have stopped work but are still paying tax
  • You sent a self-assessment tax return and over-paid
  • You over-paid your tax obligations on pension payments
  • You have purchased a life annuity

One of the most common reasons for paying too much tax if you’re employed is being on the wrong tax code. You can check with HMRC that you are on the correct code, and if you find you’ve been put on the wrong code then you may be able to claim a rebate on any overpayment.

Making the most of tax relief opportunities

You can reduce the amount of tax you pay in several ways. If you’re self-employed then the amount of money you spend on business expenses can be offset against your tax bill. This means you could pay less tax for equipment or supplies that are essential to the running of your business, as well as other expenses such as phone bills, some utilities, and even vehicle maintenance.

You can also get tax relief for pension contributions, charity donations, maintenance payments made to an ex-spouse or civil partner, or if you work on a ship outside UK waters.

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Rebate or Refund?

The two terms really apply to the same thing – a refund as a result of over-payment of tax. This can be either as a result of an error on your self-assessment tax return, or a mistake by HMRC (and yes, they do make them occasionally!). The most important thing is to respond to any potential issues as quickly as possible, and contact HMRC if you think you have been over-charged on a tax bill, or if you think you have over-paid.

Income tax rebates

These usually happen after the end of the tax year, once your P60 has been issued (if you’re employed). This will detail exactly how much tax you’ve paid in the previous year, and which tax code you have been on (make sure it corresponds with the tax code on your monthly pay slip). If there are any discrepancies then you should be able to begin proceedings to try and reclaim the money you have over-paid. It’s worth checking, as sometimes the over-payment can be considerable, and you could be due a hefty tax rebate as a result.

Repayments are usually made either directly into your bank account (or credit card, if you’ve used it to pay your tax bill), or by ‘payable order’ (effectively a cheque). Payments by payable order can take up to five weeks, or longer.

If you’re concerned that you may have over-paid by a large amount then you will need to talk to HMRC, who will be able to give you clear and expert advice on how to proceed.