There are various reasons why you may have overpaid tax within a tax year. Common causes include working only part of the year, incorrect tax codes, or outdated benefits in kind. Here, we outline the steps to claim back any overpaid tax, whether through the PAYE (Pay As You Earn) system or self-assessment.
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Tax Overpaid Through PAYE
After each tax year ends, HMRC performs a reconciliation to review your tax payments. They collect information from all sources to calculate the tax you should have paid for the year and compare it to the tax you actually paid. If they find an overpayment, HMRC will issue a P800 tax calculation or a PA302 simple assessment.
Checking Your Tax Calculation
When you receive a P800 or PA302 calculation, review it carefully to ensure it’s accurate. HMRC can make mistakes, so it’s a good idea to check the numbers yourself or consult a tax adviser.
If the calculation shows that you are due a refund, you can claim it online through your Personal Tax Account on GOV.UK. Visit www.gov.uk/personal-tax-account to check your tax position and claim your refund.
In most cases, HMRC will refund you automatically within 45 days if you don’t claim it, issuing a cheque if bank details aren’t provided. However, logging into your Personal Tax Account ensures a quicker refund process.
Correcting an Overpayment
If you suspect an overpayment but haven’t received a P800 calculation, you can check your records through your Personal Tax Account and apply for a refund if necessary. You can also contact HMRC for support in confirming and correcting any overpayment.
Self-Assessment Overpayments
If you submit a tax return via self-assessment (for example, if you’re self-employed or have income sources besides employment), HMRC will calculate any overpayment after your return is submitted. Overpayments may happen if your income has decreased compared to the previous year, resulting in excess payments on account.
Receiving Your Refund
When filling out your self-assessment tax return, you can specify a bank account for any refunds. Alternatively, you can request the refund be sent by cheque. If you owe HMRC money, such as for VAT or overpaid tax credits, you can choose to offset the overpayment against outstanding liabilities.
You can also initiate the refund through your Personal Tax Account on GOV.UK by checking your tax position and requesting repayment. If your refund isn’t received within a few weeks, contacting HMRC to follow up may help speed up the process.
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With these steps, you now know how to claim tax back efficiently, whether you’re overpaid through PAYE or self-assessment. Regularly checking your tax code and using the Personal Tax Account helps prevent future overpayments. Always ensure to review any notices or assessments from HMRC to claim any refunds you’re due.
Disclaimer: This guide is for general information purposes and does not replace professional tax advice. Always consult with a qualified adviser if in doubt.
