HM Revenue & Customs (HMRC) has issued a statement regarding claims it has received for overpayments of income tax. The department says it will issue repayments automatically to those who have overpaid through PAYEs. However, there are strict deadlines for claiming refunds, so taxpayers must act quickly.
The statement reads: “We want to make sure people pay what they owe, so we’ve changed our system to automatically calculate and send out payments where you have overpaid through PAYES. This helps us collect money faster and reduces the risk of fraud. We don’t normally ask for evidence of overpayment, but some people might still receive letters asking for information about their payments. If you’re worried about receiving one of these, please contact HMRC Customer Services.”
Taxpayers who believe they have been underpaid due to incorrect deductions or allowances should check the online calculator on www.hmrc.gov.uk/calculator. Those who think they have been overpaid should contact HMRC customer services on 0300 123 5000.
When am I more likely to have overpaid my payroll or retirement fund tax?
Your employer doesn’t withhold enough tax from your wage income. In fact, you may owe money to HMRC. And it could be because your employer hasn’t been deducting enough National Insurance contributions (NICs).
You’re probably aware that employers must pay NICs into the government’s social security fund on behalf of employees. This is known as ‘employer NICs’. But what about ‘personal NICs’? These are the taxes that individuals must pay themselves. They are deducted directly from your earnings. If you earn £10,000 each month, then you will pay yourself £2,400 per annum.
The amount of personal NICs paid depends on how much you earn and whether you work part-time or full-time. For example, someone earning £15,000 per year – around £3,600 gross per month – will pay £1,200 in personal NICs. However, if you’re self-employed, you won’t be able to claim any employment expenses such as rent or office costs. Instead, you’ll have to pay these out of pocket.
If you’ve ever wondered why you haven’t seen any extra money coming out of your paycheck, it’s likely down to underpayment of personal NICs. To find out how much you’re owed, check your payslip against our guide.
How do you figure out a P800 tax?
A P tax calculation is sent to people who earn more than £150,000 per annum, or whose annual income exceeds £80,000. If you receive one of these letters, it doesn’t necessarily mean that you owe extra tax. However, it does indicate that HM Revenue & Customs (HMRC) thinks that you might owe some tax.
If you do owe tax, you’ll usually receive a notification from HMRC via email or post. You must respond within 28 days of being notified. Failure to respond could lead to interest and penalties being added to what you already owe.
How do I get a refund if my P800 says I’m due one?
If you think you are owed money from the P800, there are steps you can take to make sure you receive it. You can also contact HM Revenue & Customs (HMRC) directly to ask about your claim.
Earlier years’ repayments
HM Revenue & Customs (HMRC) has set a limit of 3 years for making a repayment claims. This applies to those taxpayers who are liable to pay income tax under the Income Tax Act 1988.
Repayment claims can be made for any periods before the end of the current tax year. However, a repayment claim must be submitted within six months after the date of the end of the tax period concerned.
The taxpayer is only entitled to make one claim per tax year. If there is no outstanding liability for a particular tax year, the taxpayer cannot submit a claim for that tax year.
Your P800 will show the total amount due for each tax year. You should therefore check your P800 before filing a claim.
If you owe money for earlier years, it is important to keep track of the different amounts owing for each year. For example, if you paid off a loan in 2016, you might want to claim a refund for previous years.
How do I get a refund for the current tax year while it is still going on?
If you think you have over-paid tax through PAYE in the current tax year, before the end of the tax year, contact HM Revenue & Customs (HMRC). You must provide proof of payment, such as bank statements showing payments to HMRC, invoices, receipts or documents proving ownership of assets.
Before contacting HMRC, make certain you have all the relevant data regarding yourself and your taxes. This includes personal information like name, address, date of birth, National Insurance number, occupation, income, and expenses.
Once HMRC processes your claim it could be necessary to change your tax code, giving you access to refunds through PAYE. Your refund claim is processed quickly – usually within 2 weeks.
Claiming a refund is easy – simply log into HMRC’s Self Service Online Portal and complete a short form. Alternatively, print off a form from the HMRC website and send it to HMRC.
There are strict rules about claiming a refund from HMRC. Make certain you follow them closely. If you fail to file your return within four weeks of the end of the tax period, you will forfeit any refund due.
How do I get my tax refund for an emergency?
The government has introduced a scheme where pensioners who receive their state benefits as a lump sum rather than monthly payments can reclaim some of the money paid in excess of what is due. This is known as the ‘overpaid’ tax. If you’ve received a large lump sum, such as a death benefit or a redundancy payment, you could be eligible to reclaim it.
Claiming back the overpaid taxes is a good option if you want to avoid having to pay interest on the amount owed. You’ll also save yourself the hassle of writing off the overpayment each month.
How do I get a refund after the tax year is over or for a previous year?
The deadline to make a tax return is April 5th. If you haven’t already filed, you’ll still have time to file a late return if you’re eligible. You don’t need to wait until the deadline to apply for a refund.
If you want to claim a refund, you must submit the application within three months of submitting your return. This includes filing a request for a refund via the My Account section of the Taxback app.
You can use the same account number and password to access both the Taxback app and the HMRC site.
HMRC says that if you’ve paid too little tax, you can ask for a refund up to four years after paying the tax due. If you’ve paid too much tax, you can ask HMRC for a repayment.
There are different ways to get your money back. Some people prefer to use the Taxback app, while others prefer to send a paper form to HMRC.
How long do you have to file a tax refund claim?
There is a 4year time period for submitting an application for the repayment of overpaid taxes. However, there is no time limit for filing an appeal against the decision to refuse to repay overpaid tax.
If you think you are entitled for overpaid tax relief, contact us immediately. We can help you file an appeal against the decision.
Where can I learn more and see examples?
When you work, you pay income tax on what you earn. If you are self-employed, you pay corporation tax too. You might think it doesn’t matter whether you’re employed or self-employed – but it does. This video explains where you can find more information about how much tax you owe, and how to claim a refund if you’ve overpaid.
HM Revenue & Customs (HMRC) is responsible for collecting most of the taxes you pay. They are guided by accounts called “Tax Code”, “Income Tax Assessment Act 1984” and “Corporation Tax Act 1990”. These set out how much tax people must pay. HMRC works closely with companies to ensure they charge the correct amount of tax.
The Inland Revenue (IRD) is responsible for administering Corporation Tax, Capital Gains Tax and Income Tax. Their role is to enforce the law. Most people don’t deal directly with the IRD, as they do with us. But we help individuals and businesses challenge decisions made by the IRD. We provide advice to those considering starting up a new business, and offer support to entrepreneurs already trading.
Frequently Asked Questions
When might I have overpaid tax on my wages or pension?
If you receive employment income or pensions, it could be that you have paid too much tax. This happens because there are different types of taxes that you pay depending on how much money you earn. For example, income tax applies to earnings above £10,600 per annum. However, if you work part-time, you don’t pay any income tax.
The government uses PAYE to calculate what tax you owe each month. When calculating how much tax you owe, it takes into account how much you earn during the previous 12 months. So if you had a very low salary in one year, you won’t pay any tax. But if you earned lots of money, you may end up paying too much tax.
In some cases, you may have been taxed twice on the same amount of income. This happened to many people who received both a state pension and a payment from their employer. In this case, the taxman took 50% off the top.
When might I overpay income tax on pension income?
You might have paid too much income tax on your pension income. If you are receiving a state pension, you could find yourself paying more tax than you thought. This happened because some providers used the incorrect tax code. Your taxable income may have decreased. There could be another reason why your pension income has increased. The amount of state pension in the tax code was wrong. You may have multiple sources of PAYE income, such as more than one pension. You may have been taxed on a pension lump sum rather than the monthly payments.