Tax Refund Explained
Although this phrase may have eluded many of us, it’s worth knowing about ‘tax refunds’ since they are quite simply money in your pocket due to you overpaying tax. One very key piece of information here which many people do not know – tax refunds ARE NOT automatic! You have to claim for a refund – so please pay attention to the tax you’re paying to ensure you’re not owed money.
So why would you have overpaid tax? Well there are many reasons this can happen but the key ones are:
- You start a new job and are put on ’emergency tax’ for too long (this is very common, please notify your employer ASAP if you think this is happening to you)
- You get married or form a civil partnership and either yourself or your spouse/civil partner is born before 6 April 1935
- Your employer or the HMRC puts you on the wrong tax code
- You are self-employed and make a tax payment for the following year but your circumstances change in the meantime
- You’re a pensioner and your tax-free allowance hasn’t been allocated to you properly
- You have multiple jobs and your other employers deduct tax at a basic rate meaning you don’t get the full benefit of your tax-free allowances
As you can see there are many reasons you could have overpaid tax and not even realise it, so it’s very important to keep an eye on your PAYE payslip/self-assessment return to ensure you aren’t owed money.
If you’re unsure about whether or not you are owed a tax refund then simply check here – http://www.hmrc.gov.uk/gds/calcs/stc.htm
If you feel that you are owed a tax refund then you must claim for your tax refund here – https://www.gov.uk/claim-tax-refund/overview
Also if you’re reading this blog and then think “hold up…a few years ago something similar happened to me but I didn’t claim for a refund” then not to worry! You have up to 4 years to claim a tax refund. So always be sure to check back over previous tax payments if you think something was amiss. Also, HMRC must pay interest on any ‘older’ refunds so that’s always a little bonus! haha
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