How to Claim a Tax Refund

In the UK, you may be entitled to a tax refund (also known as a tax rebate) if you have paid too much tax during the year. This could happen for various reasons, such as being on the wrong tax code, overpaying on your Self Assessment, or claiming tax relief for specific expenses. Claiming a tax refund from HM Revenue and Customs (HMRC) can seem like a complex process, but this guide will walk you through the steps to ensure you can successfully claim what is rightfully yours.

Reasons You Might Be Due a Tax Refund

There are several common reasons why you might be owed a tax refund, including:

• Overpayment of PAYE (Pay As You Earn): You might have been on the wrong tax code or worked multiple jobs with the incorrect tax applied.

• Leaving a job part-way through the tax year: If you stop working before the tax year ends, you might have paid more tax than necessary.

• Pension tax: You could be entitled to a refund if you've withdrawn from a pension fund and paid too much tax.

• Work-related expenses: You may have paid for things like travel, tools, or uniforms, which can be deducted from your taxable income.

• Marriage Allowance: If you’ve transferred unused personal tax allowances to your spouse or civil partner, you might be due a refund.

• Self-Assessment overpayments: You may have paid too much if you overestimated your tax liability when submitting your Self Assessment tax return.

Understanding the reason for your overpayment is the first step in claiming your refund.

How to Claim a Refund

The method you use to claim a tax refund depends on how you paid the tax and the reason for the refund. Below are the most common ways to claim a tax refund in the UK.

1. Claiming a Tax Refund for PAYE (Pay As You Earn)

If you are employed and pay tax through PAYE, HMRC may automatically adjust your tax code if they detect an overpayment, which should result in a tax refund via your payslip. However, in some cases, you may need to claim it yourself.

Steps to Claim a PAYE Tax Refund:

• Check your tax code: Ensure you have been on the correct tax code. This can be done through your payslip or by using HMRC’s online services.

• Submit a P50 form if you’ve stopped working and want to claim a refund without waiting for the end of the tax year.

• Use your Personal Tax Account: Log in to your Personal Tax Account on the HMRC website and check if a refund is due. If a refund is owed, you may be able to request it online.

• Call or write to HMRC: If you're unsure about the process, you can contact HMRC’s helpline for further guidance.

Refunds through PAYE are usually processed automatically by HMRC, but if you need to manually claim, expect the process to take 8 to 10 weeks after submitting your claim.

2. Claiming a Tax Refund for Self Assessment

If you are self-employed or need to file a Self Assessment tax return, and you overpaid tax, you will need to claim your refund after submitting your tax return.

Steps to Claim a Self Assessment Tax Refund:

• Submit your Self Assessment return: When completing your tax return online, you can request a refund if you have overpaid tax.

• Request the refund: After submitting the tax return, HMRC will calculate if a refund is due. You can request the refund to be paid into your bank account or sent by cheque.

• Use online Self Assessment: Log in to your Self Assessment account on HMRC’s website and check your tax calculation. If a refund is due, you can request it directly through the account.

If the refund request is straightforward, HMRC typically processes it within 5 working days for online requests, but paper submissions may take longer (up to 6 to 8 weeks).

3. Claiming a Tax Refund on Pension or Savings

You may also be due a tax refund if you have withdrawn money from a pension fund or paid tax on savings income (such as from interest) and overpaid.

Steps to Claim a Refund on Pension or Savings:

• Pension lump sum withdrawals: If you've withdrawn money from your pension and paid too much tax, you can fill out the appropriate forms such as P55, P50Z, or P53Z depending on your situation.

• Savings tax: HMRC may automatically calculate a refund if you have overpaid tax on savings interest. If not, you can contact HMRC or claim it through your Personal Tax Account.

Refunds for pensions or savings overpayments can take between 8 to 10 weeks after the claim is submitted.

4. Claiming a Tax Refund for Work-Related Expenses

If you’ve spent money on work-related costs such as uniforms, tools, or business travel that has not been reimbursed by your employer, you may be able to claim tax relief.

Steps to Claim a Refund on Work-Related Expenses:

• Use Form P87: If claiming for expenses such as uniforms, travel, or professional fees, you can use Form P87 to submit your claim online or by post.

• Claim for previous years: You can claim tax relief on work expenses for up to four years after the tax year in which you incurred the expense.

HMRC generally processes these claims within 8 weeks, though online applications tend to be quicker.

5. Claiming a Tax Refund for Marriage Allowance

If you’re married or in a civil partnership, you can transfer some of your unused personal tax allowance to your spouse or civil partner, which may result in a tax refund.

Steps to Claim Marriage Allowance Refund:

• Apply online: You can apply for the Marriage Allowance through HMRC’s website. HMRC will adjust your tax code, and if you are due a refund for previous years, this will be processed automatically.

Processing for Marriage Allowance claims can take around 8 to 10 weeks.

How Long Does a Refund Take?

The time it takes to receive a refund depends on the method of application and the type of tax involved. Here’s an estimate of processing times:

• Online Self Assessment refunds: 5 to 10 working days

• Paper Self Assessment refunds: 6 to 8 weeks

• PAYE refunds: 8 to 10 weeks

• Pension/savings refunds: 8 to 10 weeks

• Work expense refunds: 2 to 8 weeks

• Marriage Allowance refunds: 8 to 10 weeks

Using HMRC’s online services often speeds up the process compared to paper submissions.

How to Track the Progress of Your Refund

You can track the status of your tax refund by logging into your Personal Tax Account or Self Assessment account on HMRC’s website. Alternatively, you can call HMRC’s helpline for updates on your refund status.

Can’t Pay Your Tax Bill?

If you're owed a refund but also have an outstanding tax bill, HMRC may apply the refund toward your outstanding balance. If the refund doesn’t cover the full amount, you'll need to make up the difference.

If you cannot pay your tax bill in full, you can contact HMRC to arrange a Time to Pay agreement, allowing you to pay in instalments.

Conclusion

Claiming a tax refund from HMRC can be a straightforward process if you follow the correct steps. Whether it’s through PAYE, Self Assessment, pensions, savings, or work-related expenses, ensuring that you provide accurate information and submit the necessary forms will help speed up the process. Always check your eligibility before submitting a claim, and keep an eye on the progress using your Personal Tax Account.

For more information or to claim a refund, visit GOV.UK or contact HMRC directly.