How do you claim a tax refund?

It’s highly likely you’ll have heard of income tax and you’re probably paying it out of your salary on a monthly basis. When we earn an income of any sort, whether that’s through employment, pension or property renting, we pay income tax. This tax is used to help to fund the Government and any public sector organisations. This includes our police force, NHS and housing. The amount we pay depends on the amount we earn. However, in some cases, people can pay too much tax over the years and are applicable for a tax return.

Who can claim a tax refund?

In the 2017-2018 tax year, according to HMRC, tax repayments given to individuals totalled up to £3.1 billion. This is due to tax codes being assigned incorrectly based on given income, where the subject has been charged that incorrect amount of tax. 

There are multiple reasons you may have overpaid tax, these include:

  • you started a new job and had an emergency tax code
  • your employer was using the wrong tax code
  • you only had a job for part of the tax year
  • you had more than one job at the same time
  • you are a student and you only worked during the holidays
  • other income which HM Revenue & Customs (HMRC) tax through your tax code has reduced
  • you stopped working and had no taxable earnings or benefits for the rest of the tax year
  • your circumstances changed – for example, you changed from full-time to part-time work

Calculating tax

Pension funds can also be affected by income tax. A total of £1.9 billion was redistributed from the 2017-18 tax year to personal pension funds that had overpaid on tax. 

You might have paid too much tax on your pension income if:

  • your pension provider was using the wrong tax code
  • your taxable income has reduced
  • the amount of state pension in your tax code was wrong
  • you had more than one source of PAYE income, for example, more than one pension
  • you paid too much tax on a pension lump sum

How do I claim my tax refund?

If you believe that you are due a tax refund then the first step is to check. You can do this by using the income calculator on the government website. This shows how much income tax you should pay that year. It also compares it to how much you actually pay. This means you can see if you’re applicable for a refund.

If you find out that you’re owed a tax refund you can apply either online or by phone by contacting the HMRC customer services team. They’ll guide you through both processes, however, you’ll need certain documents handy. These documents include:

  • Your personal details- including your full name, address, date of birth and National Insurance Number
  • Details of your past employers or pension providers- their PAYE scheme reference number. This can be found on payslips or ask your employer/ pension scheme provider.
  • Estimates of your income

Why should I claim a tax refund?

With so much being given back each year it can be seen as quite a common thing to occur when changing employment. With such an easy process to check it, we encourage you to do so just in case you’re owed something. At the end of the day, this is money that you’re owed by the government. Since they do not automatically check for you it is vital that you complete the checks yourselves so you do not miss out. 

Getting in contact with HMRC for other enquiries 

HMRC is responsible for many other financial services across the government. These include the following; Child Benefit, Child Tax Credits, Job Seekers Allowance and Pension Schemes. 

Tax calculator