It always feels painful to pay tax in the first place. Imagine if you have paid too much. If you are a PAYE taxpayer or you complete a self-assessment, you could qualify for a tax rebate.
In the coming months, the HMRC will be writing to people who may have paid too much tax confirming your refund. But how will you know if this is you?
Why you might have overpaid tax
There are many reasons why you might have paid too much tax. This can happen if you are employed, self-employed, or retired. You could have started a new job, for instance, and therefore been taxed under an emergency code. It could be that your employer has been using the wrong tax code – or that you only had a job for part of the tax year, but the tax was calculated as if you would be working for all 12 months. It is common for those working full-time at the start of the year, who move to part-time mid-way through, to have paid too much tax over the year.
Getting your refund
It is possible that you will need to do nothing to reclaim your tax. HMRC checks the tax paid each year, and if you have not paid the right amount, they will issue a tax calculation form called a P800. These forms are issued between June and October – and should be with you at the latest by the end of November.
If this statement reveals you have paid too much, then HMRC will provide advice on how to claim this back. HMRC will likely ask for your personal bank details for an online transfer of money. If you do not send these details, HMRC should send you a cheque within 45 days
The statement may also reveal that you haven’t paid enough. You are also expected to make reasonable attempts to pay this money to HMRC, and fined for not taking reasonable care if you don’t.
What about this year?
Emergency tax codes can be obvious and costly. Therefore, it is likely that you already know you have paid too much tax this year. It is possible to report this over-payment online or by telephone. You do not have to wait for your P800.
The content in this article was correct on 19th May 2019. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on taxation. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.