25th January 2024Tax refunds – could you be eligible?

Is there a better feeling than finding out that you have paid too much tax? Stevie Heafford, Tax Partner at HW Fisher explains who could be eligible for a tax rebate, how to receive any funds that you might be owed, and top tips when looking into whether you could claim back expenses.

Why might you get a tax rebate?

The most common reason for a tax refund from HMRC is that you have paid too much Income Tax. There are a number of ways this can happen, from using the wrong tax code, changing jobs during the tax year, changes to pension contributions, or if you have received government allowances such as Jobseeker’s Allowance, or Employment and Support Allowance.

For those who are self-employed, it could be that they have paid their payments on account based on an estimated income that ended up being higher than what they actually earned.

Alternatively, they might have incurred business related expenses that are tax deductible but did not claim them when calculating their tax liability.

How do you know if you have paid too much tax?

If you have paid too much tax, you should receive a P800 letter from HMRC that will outline how much you are owed and how to claim a refund. It might not always be good news – you could also receive a Simple Assessment letter if you have underpaid your taxes and need to make a payment.

You will only get a letter if you are employed or if you receive a pension, and they are typically received between June and November.

If you are self-employed, you can claim a tax refund from HMRC through your self-assessment tax return. The deadline to complete this for the tax year ended 5 April 2023 is January 31^st 2024. You can find advice on how to complete your self-assessment here.

What to do if you receive a P800?

If you have paid too much tax, it is quick and easy to claim it back. Once you have logged into your online Government Gateway account and completed all the necessary steps, the money should be in your account within 5 working days. You can also claim a refund through HMRC’s mobile app.

If you forget or take too long to do this, don’t worry – HMRC will post you a cheque for the amount instead, although this typically takes a longer time to receive.

Three top tips to keep in mind

• Check your tax records and expenses if you think you might be eligible for a refund. You can do this by logging on to your personal tax account on the HMRC website, or by contacting HMRC directly. Claims can be made up to four tax years. In more complicated cases, seeking professional advice from an accountant is advised.
• Don’t forget to claim on work related expenses. This can include cleaning, replacing or repairing work uniforms, petrol costs and any professional subscriptions or memberships that you need to do your job. The latest figures from HMRC show the average claim is worth £125 a year. You can find out what expenses qualify here.
• Remember that HMRC will never contact you about a tax rebate via text message or email. Sadly HMRC-related scams are becoming increasingly common, where fraudsters impersonate HMRC and contact individuals to say that they are owed money. They will then invite people to share their payment details so that they can receive their ‘refund’ when in reality their funds have become seriously at risk of being stolen.

If you are interested in discussing your own specific circumstances, please get in touch with Stevie Heafford.