Although it's unusual, there may be times when you end up over or underpaying HMRC tax. It could be something you notice it yourself, or HMRC may contact you and inform you that you owe or are owed money.
If you have overpaid tax, you are eligible for a 'tax refund' or a 'tax rebate'. There are several ways you can claim back the money you have overpaid to HMRC. You can also choose whether you want to be paid via a bank transfer or cheque.
HMRC should notify you if you are due a tax refund. However, you can also claim a refund if you notice before they do and want to ensure you get your money as soon as possible.
In this guide, we'll look at how you can claim a tax refund from HMRC, how long it may take to be processed and what you can do to speed up the refund process.
It usually takes between five days to eight weeks to get a tax refund from HMRC, although it can take up to 12 weeks. How long a tax rebate takes depends on how you apply (either through the post, over the phone or online) and if HMRC has to conduct further security checks.
Once you have contacted HMRC about a tax rebate and they have approved your request, the amount of time it takes to receive your refund depends on how you want to be paid. For example, it should take five days to have the money paid into your bank account. If you want to be paid via cheque, HMRC will send you one within six weeks of when they first sent you the tax calculation letter.
If HMRC discovers the overpayment, they will contact you to find out how you want to be paid. The payment method you request will impact how quickly you are sent the tax refund. Bank transfers are much quicker than cheques.
Continue reading to find out how you can find out if you are due a tax refund and the different methods for how you can claim it.
If you think you're entitled to a tax rebate, you can apply for a refund on the government website. You need to state what you think you paid too much tax on (such as income, job expenses or your pension). You'll also need to say which tax year you think you overpaid in, as this affects how you can claim your refund.
Alternatively, you can claim a tax refund by writing to HMRC or giving them a call. If you are calling from within the UK, you can phone HMRC on 0300 200 3300. If you are calling from abroad, you should call +44 135 535 9022. Lines are open Monday to Friday, 8am to 6pm. You will need to answer some security questions, so make sure your personal details are up to date on your personal tax account.
You can also write to HMRC at:
Pay As You Earn and Self Assessment
HM Revenue and Customs
When you write to HMRC, make sure to include relevant information, such as the year you are claiming a tax refund from and your National Insurance number.
The deadline for claiming a tax refund is four years. If you don't claim a refund in this period, you won't receive your money. It's, therefore, best to check you've paid the correct tax each year so that you can claim any tax refunds as quickly as you can.
You may need the following information when you make a claim:
- National Insurance number
- tax year that you're claiming for
- your tax code
- your employer’s PAYE reference number (found on your P60)
- details of taxable income
To claim a tax refund online, you'll need your Government Gateway username and password so that you can log into your personal tax account. Once you have access to your account, you will be able to see how much Income Tax you have paid within the past five years, track tax forms that you've submitted online and many other features.
If you haven't got a personal tax account already, you can easily set one up. You'll need your National Insurance number and two forms of ID, such as a valid UK passport, UK driving license or a recent payslip.
HMRC should send you a P800 form if they have calculated you are due a tax rebate. This letter will tell you how you can claim a refund. Your letter may tell you that you will be sent a refund via a cheque. If this is the case, you don't need to take any further action as your cheque will arrive within 14 days.
It's a good idea to check your tax code as this can indicate whether you're paying the correct amount of tax. When you start a new job, your employer may put you on an emergency tax code. HMRC may also send your employer the wrong tax code. This could mean you aren't paying the correct tax and you may be eligible for a refund.
You can use our Income Tax calculator to find out how much tax and National Insurance you should be paying. From this, you can work out whether you have been over or underpaying tax.
Why am I due a tax refund?
You may be due a tax refund if you think you have been overcharged tax. There are various reasons why this may have happened such as:
- you are on the wrong tax code
- you were charged expenses for uniform or tools
- you have multiple PAYE jobs
- your state benefits have changed
- you were charged too much tax on savings interest
How will HMRC contact me about a tax refund?
HMRC will send you a P800 tax calculation letter to let you know if you have under or overpaid tax. They may alternatively send you a Simple Assessment letter if you owe HMRC money.
You will receive a P800 letter if you are owed a tax refund because:
- you are on the wrong tax code
- you finished a job and started a new one within the same tax year
- you work and have started receiving your pension
- you receive Employment and Support Allowance or Jobseeker’s Allowance
Only employed people or those who receive a pension will be sent a P800 or Simple Assessment letter. Individuals who are self-employed and pay tax through a Self Assessment tax return won't get either letter. Instead, their bill will be adjusted to accommodate their under or overpaid tax payment.
The letters can be sent out anytime between June and the end of November. If you haven't been sent a letter by the beginning of December, you can apply for a refund via the government website, over the phone, or through the post. It's important to contact HMRC if you think you have underpaid tax. Otherwise, you may be ordered to pay a penalty.
If you're due a refund for more than one tax year, you will receive the money in one payment.
What do I do if I receive a tax refund email?
HMRC never sends emails concerning tax rebates and refunds. They will always send you a P800 or Simple Assessment letter if you are owed money. Don't click on any links or reply if you receive an email claiming to be from HMRC and suggesting you are owed a tax refund. It is part of a scam: clicking on the link may download malware onto your device. You should never respond with your personal or financial details, either, as scammers can use this information to steal your money.
If you are unsure whether an email is from HMRC or not, you should forward the email to [email protected] and then delete it from your inbox. You can also use this email to report suspicious messages from social media.
HMRC won't contact you about tax refunds via WhatsApp, so you should forward any messages pretending to be from HMRC to 60599.
How can I get a quick tax refund?
The quickest way to claim money from a tax refund is through your personal tax account. After you have made a claim online and it has been successfully processed, the refunded money should appear in your bank account within three to five days.
You should follow the steps on your P800 letter to reclaim your tax refund. It's quicker to request a bank transfer, as it should take five days. It can take 14 days to receive a cheque if you requested one. If you haven't replied to HMRC about your preferred choice of payment within 21 days, they will automatically send you a cheque within six weeks.
What happens if I have underpaid tax?
HMRC should discount underpaid tax of £50 or less. If you owe between £50 to £2,999.99, HMRC will usually take the money back by reducing your PAYE code for the following financial year. If you owe over £3,000, you will be told to pay the money directly back to HMRC.
You can ask HMRC if you can spread the payment over the course of two tax years if you have unpaid tax worth between £50 and £2,999.99, and paying it will cause you financial hardship if paid in a single financial year.
It's a good idea to try and reduce your tax bill to under £2,999.99 by repaying part of it immediately. This means that HMRC can reclaim the remaining money through PAYE.
Can I claim a tax refund after losing my job?
You may be due a tax rebate if you were made redundant or dismissed from your job within the tax year, you previously paid tax through PAYE, and you are still unemployed. The amount you are entitled to will depend on how much you earned since the beginning of the tax year and how much tax you paid on your various forms of income.
There are various factors that affect how you can claim a tax refund after you lose your job. It depends on how long you've been unemployed if you've claimed taxable benefits since losing your job, and whether you were able to find another job within four weeks of losing your previous one.
The Benefit Office will repay your tax refund if you've claimed taxable benefits such as Jobseeker’s Allowance and Carer’s Allowance. To claim your refund, you'll need to send the Benefits Office parts 2 and 3 of your P45. They'll either repay the money at the end of the tax year or when you stop claiming benefits (whichever comes first).
Your new employer will refund you the tax you are owed through PAYE if you start a new job. You'll need to give them parts 2 and 3 of your P45. If you've been unemployed for over four weeks, you'll need to fill out a P50 form and send it to HMRC along with parts 2 and 3 of your P45.
The amount of time it takes to get tax refunds from HMRC depends on several factors. It will take HMRC up to 12 weeks to process your tax refund claim if you apply through the post or over the phone, whereas the process is much quicker if you apply via your personal tax account. The refunded money could appear in your bank account within three to five days if you file a tax rebate claim online.