HMRC has issued a warning to taxpayers urging them to check whether they have overpaid tax and claim any refunds owed to them.
The tax authority highlighted that a ‘million’ people have missed out on claiming their dues and outlined how people can find out if they could be among them.
Tax refunds are owed to those who pay too much income tax within a single tax year, something that can occur for a variety of reasons.
HMRC no longer automatically issues PAYE refunds, meaning taxpayers must take steps themselves to reclaim any overpaid tax.
The most recent HMRC figures revealed that over 730,000 PAYE refunds went unclaimed last year, with the average refund worth around £855 — meaning Brits collectively left a staggering £624million with the taxman, according to Sky News.
Posting on X, the official HMRC account encouraged people to log into the HMRC app to reclaim any tax they are owed, though there are several ways to check eligibility and secure a refund.
Taxpayers can use the checker tool on Gov.uk to find out whether they may be entitled to a tax refund. In most cases, those who have overpaid tax will also receive a P800 tax calculation letter following the end of the tax year in which the overpayment occurred.
The letter will contain a full breakdown of HMRC’s calculations, detailing how much tax you should have paid versus how much you actually paid. Should you believe there is an error in these figures, you will need to get in touch with HMRC directly.
These letters also contain instructions on how to claim your money and will indicate whether you can do so online via the official Government website. Alternatively, you can claim a refund through your personal tax account, the HMRC app, or by getting in touch with HMRC directly.
Taxpayers must claim their refund within four years. Once claimed, the refund should arrive within five working days if submitted online, or within six weeks if you opted for a cheque to be posted to you.
Your P800 letter may instead state that HMRC will send you a cheque, in which case you should expect to receive it within 14 days of the date shown on your letter.
MoneySavingExpert has previously warned taxpayers to remain vigilant about texts, emails or calls regarding tax refunds, as HMRC will always contact you by post about refunds, and scammers may attempt to exploit those anticipating money back.
Tax refunds can be issued if you paid too much tax on:
- pay from a job
- job expenses such as working from home, fuel, work clothing or tools
- a pension
- a Self Assessment tax return
- a redundancy payment
- UK income if you live abroad
- interest from savings or payment protection insurance (PPI)
- income from a life or pension annuity
- foreign income
- UK income earned before leaving the UK
One of the most frequent reasons for paying the wrong amount of tax is having an incorrect tax code, which can occur if you switch jobs during the tax year and may result in you not being allocated the correct personal allowance.