Every year, many people find that they have paid too much tax. This cannot always be fixed during the period of work, so it leads to getting a tax rebate at the end of the year. You have four years to make a claim if you think you are entitled to a repayment on your tax and HMRC has not spotted it first.
Check your P60 or P45
The first thing you should do is check your P60 (the form you get at the end of each tax year) and your P45 (the form you get when you leave your workplace). This will detail how much you have been taxed. Look at your tax code If you only have one job, you should have a tax code of three numbers and the letter L. If you have two jobs, one of your incomes will be taxed at BR. There can be mistakes made on the tax code and this is a common reason for needing to claim for a tax refund.
Write to HMRC
You will need to send a letter to HMRC detailing that you believe you have overpaid tax. You will need to include details of your pay, including your P60 or P45s will help to speed up this process. If you are on any benefits, you will need to include this with your letter for your tax refunds. Make it clear which tax year you are applying for. What will HMRC do? HMRC will look into your tax claims for you. They will work out whether you are entitled to getting your tax back and just how much is due to you. You will receive the money that you are owed in the form of a cheque.
What about those who are self-employed?
The above only works for those who pay their tax through PAYE (pay as you earn). If you fill out a self-assessment each year, you may still end up paying too much tax. You can claim this back the exact same year but rather than your P60, you will need to include details from your self-assessment that was carried out. How do you get the money back? The HMRC will pay any money due back in one of three ways. You could receive the money in the form of a cheque or it may be refunded as a bank transfer. However, the most common way to repay any tax due is by placing it in your self-assessment account. This will be used to cover any tax you owe at a later date.