What is a tax refund?
A HMRC tax refund, more commonly known as a tax rebate, is issued to you by HMRC when you have overpaid on your tax for the year or have paid too much tax on your pension payments. The amount that you will get varies depending on your individual circumstances, such as your status of employment.
Circumstances where you may receive a tax refund:
If you are employed:
If you’re employed, you may be able to claim a tax refund if too much tax has been taken from your pay. To reclaim tax for the current year, you must first check to see if your tax code is wrong, using an online tool. You may think it is wrong if the numbers and letters of your tax code don’t corroborate with your situation, or you believe your income tax is wrong. If you think your tax code is wrong, tell HMRC and they will adjust it. If you are due a refund, you will receive one in your pay.
To reclaim tax from a previous year, you can use the tax rebate calculator on the HMRC website to see if you are due a refund. You must be a basic/higher rate taxpayer, born after 1948 and getting the personal allowance. If HMRC know that you have paid too much tax, they will usually post you a P800 tax calculation by the end of July to inform you of this. If you believe you have paid too much and you need your refund sooner, you may be able to claim online or call/write to HMRC telling them why you think you have overpaid.
If you have stopped work:
If you have overpaid tax because of a redundancy payment, you should call HMRC, as they may be able to refund you before the end of the tax year. If you left your job and you receive benefits such as Jobseekers Allowance, Employment and Support Allowance, Carer’s Allowance or Incapacity Benefit, you won’t be able to get a tax refund straightaway. If you are out of work for less than four weeks, you’ll get a refund at the start of your new job if you are due one.
If you sent a tax return:
You can claim a tax refund if you made a change to your tax return after you filed it, entered the amount wrong when you paid your self assessment bill or stopped being self employed and you have payments on account. The way you claim depends on how you filed your tax return, for instance if you did it online, you can claim online.
If you receive a pension:
If you pay too much tax on your pension, your pension provider may pay you back automatically. If they don’t, HMRC will send you a p800 calculation by the end of July. If you have retired and only receive state pension, you need to fill in form P50. You could have also paid too much tax if you have taken a lump sum out of your pension, if this is the case you should fill in form P53.
If you have bought a life annuity:
You can claim a refund if you have paid too much tax on a life annuity that you have bought. To reclaim tax, fill in form R89 and send it to the company who pays your annuity.
When will I get my refund?
HMRC generally send refunds within 5 weeks of claims being processed, but it may take longer during busy periods. You should wait 5 weeks before making an online claim and 6 weeks after making a postal claim to contact HMRC in regards to the payment.