Keeping track of what tax you owe can be complicated, but it’s worth the extra effort to make sure you aren’t being overcharged. If you ever suspect you might be paying too much tax, you can claim a refund from HMRC.

How to check if you are paying too much tax

Start by verifying whether your tax code is correct. Your tax code is a combination of numbers and letters used by HMRC to determine the amount of tax to deduct from your income. An incorrect tax code could lead to overpaying tax.

To check your tax code, you can refer to your payslips, P45, or P60 forms. These documents provide valuable information about your income and tax deductions. Additionally, HMRC offers an online tool to check your income tax. By entering a few details, you can view your tax code and ensure its accuracy. If you spot any discrepancies or believe that your tax code is incorrect, you should contact HMRC promptly to address the issue.

If your tax code is correct, it may still be worth investigating getting a refund in certain circumstances. For example, if you did not work the full tax year – perhaps because you are a recent graduate in your first job, or you lived abroad for some of the period – your tax may have been calculated on a full year’s worth of income, leading to overpaying.

If you earned less than the tax-free Personal Allowance in a given year, then you should not be paying any income tax at all. The allowance is currently £12,570 for the current tax year, and has been the same since the 2021/2022 tax year.

How to claim a tax refund

If you are self-employed or otherwise complete a Self Assessment tax return, HMRC will send your refund once they have processed your tax return.

But if you are taxed under Pay As You Earn (PAYE), HMRC will automatically calculate your tax liability based on the information provided by your employer.

If the taxman calculates that you have overpaid, you will probably receive a tax calculation letter (P800) saying you’re due a refund. If you’re eligible, you may then be able to claim the money online and get it sent straight to your bank account. If you can’t claim online or if you don’t log in within 21 days to claim your refund, you’ll get a cheque instead. It’s therefore always a good idea to make sure HMRC has the correct home address for you.

If you believe you have overpaid tax and don’t receive a P800, you can initiate the refund process by contacting HMRC directly. This can be done either by phone or online through the official government website.

How long a tax refund will take

The timeframe for receiving a tax refund can vary. HMRC aims to process refunds within five weeks of receiving a complete tax return. However, during busy periods, such as the end of the tax year, the processing time may be longer. So get your tax return or refund claim in as soon as possible if you don’t want to wait too long for your money.

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