Claiming a tax refund

Our experts tell you everything you need to know about HMRC refunds

Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust. Or you can check out our online calculator to see if you could be due a refund.

Why might you be entitled to a tax refund?

If you have paid too much tax to HMRC, you are entitled to claim that back. HMRC might inform you that you have paid too much tax by sending you a P800 form – if this is the case, you might be able to claim your refund online. The P800 tax calculation letter will tell you if you can claim it this way.

There are a number of reasons why you might be eligible to claim a refund (also known as a tax rebate) on the amount of Income Tax you have already paid. Some of the reasons you might be eligible for a tax refund include:

  • You are employed and have had too much tax deducted from your pay, maybe due to an incorrect tax code.
  • You have stopped work.
  • You have sent a Self Assessment tax return and paid too much tax.
  • You bought a life annuity.
  • You have been left out of pocket by paying for your own work-related expenses, for example you have paid for your own travel costs or uniform costs.
  • You have paid savings interest on your savings and yet your income is below the personal allowance threshold.
  • You live in one country and get income from another, for example you are a UK resident getting income from overseas.

If you think you are entitled to a tax refund, check out our online calculator  to see how much your tax rebate could be worth. Or you can call one of our friendly team on 0330 122 9972 to find out.

How do you get a tax refund if you are employed?

If too much tax has been taken from your wages or salary, you may be able to claim a refund. The method you need to use to claim your refund depends on which tax year you think you have overpaid in. The tax year runs from 6th April to 5th April the following year and you can backdate your rebate claim for up to 4 years.

There are a number of email and text scams about tax refunds doing the rounds at the moment. As it currently stands, HMRC don’t send out any notifications for tax rebates by text or email. They only notify you of a tax refund by post. If you receive a suspicious looking email or text about a tax rebate, you can report it to HMRC.

Refunds for the 2017/18 tax year

If you think your tax code is incorrect and you have paid too much in tax, you can inform HMRC. They will then check your tax code and will correct it if they think you have been taxed using the wrong code. Once it has been corrected, you will get a tax refund on your overpaid tax through your pay – your employer will sort it all out for you.

Refunds for the 2016/17 tax year

Once your tax has been calculated for this tax year (this usually happens between June and October, following the end of the tax year), you will be sent a P800 if HMRC think you have paid too much tax after they have completed their calculations. You can’t claim a refund before you have been sent this P800 form. The P800 letter will tell you how to claim your refund.

Refunds for the 2015/16 tax year and before

If you think you have paid the wrong amount of tax for theses tax years, you can use the HMRC Income Tax tool to estimate how much you have paid. If you think you have paid too much in tax, you can claim online for this tax year and prior.

To claim online from HMRC, you will need your employer’s PAYE reference number which you will find on your P60 and the details of all the taxable income you received in that tax year, including any taxable benefits. You can only claim for yourself, not other people, in this way.

Of course, you don’t have to claim online if you don’t want to. There are other ways to claim if you would rather not use the online service. You can either call HMRC or write to them and explain that you think you have overpaid your Income Tax. You will need the following information to do this:

  • The reason why you think you have overpaid,
  • Your National Insurance number,
  • Details of the job or jobs you had during that tax year as well as any State benefits you were receiving,
  • Your P45, if you received one.

Once you have informed HMRC that you think you have overpaid your Income Tax, HMRC will either contact you for further information, inform you that you aren’t due a tax refund and explain why or they will issue you with a tax refund. You could get your refund in any of the following ways:

  • By cheque (this may also be called a ‘payable order’)
  • Directly into your nominated bank account
  • Sent to your nominee, either by cheque or direct bank refund, if you have nominated someone else to receive your refund money. You can use this option if you don’t have a bank account – you can nominate someone else who does have a bank account to receive your refund money and they can give you the cash once the refund has cleared in their account.

HMRC can only pay refunds into UK bank accounts so if you have an overseas account, you can’t use the direct bank transfer method to receive your income.

How do you get a tax refund if you have stopped work?

The way to get your tax refund if you have stopped work all depends on the reason why you have stopped work. There are different methods to use if you were made redundant, left your job voluntarily or have left the UK to live abroad.

If you have been made redundant

You need to contact HMRC if you have been made redundant and have overpaid tax as a result of your redundancy payment. They will hopefully be able to refund you before the end of the tax year. You can call them on 0300 200 3300 (textphone 0300 200 339) – make sure you have your National Insurance number at hand to make the process easier for you.

If you have left your job

HMRC won’t give you a tax refund immediately, if you are claiming any of the following benefits:

  • Jobseeker’s Allowance
  • Employment and Support Allowance
  • Incapacity Benefit (if you have been receiving it for more than 28 weeks)
  • Carer’s Allowance.

To get this tax back, you need to give parts 2 and 3 of your P45 to the Jobcentre Plus and if you have overpaid tax, you will get a refund. This will either be at the end of the tax year or when you start a new job. If you are out of work for less than 4 weeks, your refund will be sorted out automatically through your wages from your new job so you can’t claim a refund yourself.

If you aren’t claiming any of the above benefits and you’re not going to be going to work for at least 4 weeks, you need to fill in form P50 to claim your tax refund. This might apply to you if you have stopped work so that you can go to college, you are still looking for a job or you have retired.

If you leave the UK to live abroad

To claim your refund under the following circumstances, you need to fill in HMRC form P85:

  • You are leaving the UK permanently to live abroad
  • You will be working abroad full-time for at least one full tax year (6th April to 5th April the following year).

How do you get a tax refund if you have sent a Self Assessment tax return?

There are a number of reasons why you might be entitled to a refund after submitting your Self Assessment tax return, for example you may need to make a change to your tax return after you have filed it, you may have accidentally paid too much when paying your tax bill or you may have stopped being self-employed but already have made a payment on account for the following tax year. The way to claim your tax refund all depends on how you filed your tax return in the first instance.

If you sent your tax return online

It’s quite simple to request a tax refund if you filed your Self Assessment tax return online. You can log into your HMRC account, go to your ‘Self Assessment Details and Options’ and from the ‘More Options’ menu, choose ‘Request a Repayment’. From there, you just need to follow the instructions to claim your refund.

If you sent a paper tax return

You will need to write to HMRC to request a refund. You will need to include the following information:

  • Your Unique Taxpayer Reference (UTR) number – you will find this on previous tax returns and any correspondence you have received from HMRC about your Self Assessment tax return.
  • Your reasons for requesting a refund.
  • Your bank details, or those of your nominee if you want your refund to be paid to someone other than yourself.

If you paid by debit or credit card, the tax refund will be paid back to the card you used. Otherwise, your refund will be paid into the bank account details you sent with your tax return (or in the letter requesting a tax refund). HMRC can only pay refunds into UK bank accounts.

The address for writing to HMRC is:

Self Assessment

HM Revenue and Customs

BX9 1AS

Once HMRC have received your request for a refund, they will do one of the following:

  • Refund you using your credit or debit card, if that’s how you originally paid your Self Assessment tax bill.
  • Refund you directly into your bank account.
  • Refund you directly into the bank account of your nominee (if you have nominated someone else to receive your refund money)
  • Send you a cheque (also known as a ‘payable order’)
  • Contact you to request more information
  • Inform you that you are not entitled to a tax refund and explain why.

How do you claim a tax refund if you receive a pension?

There’s a possibility that you might be owed a refund if your pension provider has deducted too much tax from your pension.

Your pension provider may pay you back automatically if they realise they have deducted too much tax from your pension income. If you’re not paid back automatically, HMRC will send you a P800 tax calculation at the end of the tax year – these are usually received by the end of September. Your P800 will tell you how you can claim your refund – if you can claim it online, they will explain what you have to do. If you are going to receive a cheque to cover your tax refund, the P800 will inform you of that and you should receive your cheque (also known as a ‘payable order’) within 14 days. If you are owed a tax refund for more than one tax year, it will all be lumped together and refunded on the same cheque.

There are a number of email and text scams about tax refunds doing the rounds at the moment. As it currently stands, HMRC don’t send out any notifications for tax rebates by text or email. They only notify you of a tax refund by post. If you receive a suspicious looking email or text about a tax rebate, you can report it to HMRC.

If you think you have paid too much tax on your pension income, you can call HMRC to inform them if the following circumstances apply:

  • If your pension provider doesn’t automatically refund you and you need the refund in that same tax year.
  • You don’t receive a P800 tax calculation from HMRC.

If you have retired and only receive the State Pension

You need to fill in form P50 to inform HMRC that you have overpaid on your Income Tax.

If you have taken cash or a lump sum from your pension

There’s a possibility that you may have overpaid Income Tax if you have taken cash or a lump sum that is partly tax-free from either of the following:

  • A defined benefit scheme
  • A defined contribution scheme

For lump sums from defined benefit schemes (also known as trivial commutation), you will get a refund as a result of your Self Assessment tax return if you need to submit one. If you don’t need to send a tax return, you need to send form P53 to HMRC for your refund.

For lump sums taken from defined contribution schemes (also known as a drawdown), if the payment used up all of your pension pot and you have no more income for that tax year, you need to fill in HMRC form P50Z to claim your tax refund. If the lump sum used up all your pension pot but you have other taxable income for that tax year, you need to send HMRC form P53Z to claim your tax refund. If the payment didn’t use up all your pension pot and you’re not taking regular payments from it, you need to send HMRC form P55 to get your refund but you can only use this method if your pension provider can’t refund you.

If you bought a pension annuity after April 2007

Any tax you owe on these kinds of pension annuities is collected through PAYE in the same way as a company or personal pension. This means that you will receive a P800 tax calculation if HMRC believes you have paid too much tax – you will usually receive this by the end of September following the end of the tax year.

If HMRC send you a P800, it will usually be followed by cheque within 14 days. you shouldn’t need to do anything to get your refund.

Do be warned that there are a number of email and text scams about tax refunds doing the rounds at the moment. As it currently stands, HMRC don’t send out any notifications for tax rebates by text or email. They only notify you of a tax refund by post. If you receive a suspicious looking email or text about a tax rebate, you can report it to HMRC.

If you haven’t received a P800 (or you need your refund in the same tax year and you can’t wait for a P800 calculation), you can contact HMRC to tell them that you are due a tax refund.

If the pension annuity was bought before April 2007, unfortunately you’re not entitled to a refund.

If you live abroad

The rules are different for claiming tax refunds on UK pensions if you don’t live in the UK (for example, if you are an ex-pat living abroad). You can contact HMRC on 0300 200 3300 (+44 135 535 9022 if you are calling from outside the UK).

What happens if you bought a life annuity?

A life annuity is a kind of scheme you can purchase from an insurer, which is supposed to give you a guaranteed income for life. You buy them from an insurer in return for a lump sum. If you have overpaid tax on the income from a life annuity, you can claim a tax refund.

Life annuity payments are usually taxed automatically at 20% but you might be entitled to claim a refund if you don’t need to pay Income Tax, for example, if the life annuity income is less than your personal allowance and you have no other income.  If this applies to you, you can either request to receive your life annuity in the form of tax-free income, or you can claim a refund for the tax you have overpaid.

To request tax free income, you can fill in HMRC form R89 and send it to the company which pays your life annuity. If it is a joint annuity, you need to use form R86 instead. However, you need to make sure that you inform the company if your income goes over the personal allowance threshold or you may end up getting a tax bill through the post.

To reclaim the tax from HMRC, you can send form R40. You need to claim within 4 years of the end of the tax year you are claiming for.

If you need help with your life annuity, you can contact the HMRC Retirement Annuity helpline on 0300 200 3302 (+44 151 471 8436 if calling from outside the UK). The lines are open between 8am and 8pm Mondays to Fridays, and 8am to 4pm on Saturday.

When will you get your tax refund?

How quickly you get your tax refund depends on the method you have chosen to receive your tax refund money.

If you are expecting a cheque, HMRC will usually send that to you within 5 weeks, but it may take a little longer in certain circumstances.

If you are expecting payment to your credit or debit card, you should receive this within 5 working days.

If you are expecting payment directly into your bank account, you should receive this within 5 working days. HMRC can only make payments directly into UK bank accounts. It can take up to 25 days though, if the refund relates to tax taken from your pay or pension and you haven’t received a P800 tax calculation from HMRC.

If you haven’t received your refund within 5 weeks if your claim was online, or 6 weeks for a postal claim, you should contact HMRC to find out why there has been a delay.

How can DSR Tax Claims help?

We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful.  Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax rebate. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

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