What is a tax refund
A tax refund is a refund of tax which has been overpaid. There are a number of reasons why tax may have been overpaid, including:
- you start a new job and are taxed under an emergency code for a while
- you marry or form a civil partnership and you or your spouse or civil partner is born before 6 April 1935
- HM Revenue and Customs (HMRC) sends the wrong tax code to your employer or your employer does not use the correct code
- you are self-employed and you make payments on account for the following year, under the Self Assessment scheme. These payments are too high because of a change in your circumstances, for example, there has been a downturn in your business. You have not made a claim to reduce your payments on account and your final tax liability turns out to be less than the tax you have actually paid
- you’re a pensioner with more than one occupational pension and your tax-free personal allowances have not been allocated properly so you’ve paid too much tax
- you have more than one job. The employer at your second job will automatically deduct tax at basic rate so you may not get the benefit of all your tax-free personal allowances. This will frequently apply if you are a student or low-paid worker.
For more information about emergency PAYE codes, see The Pay As You Earn (PAYE) system. For more information about wrong tax codes, see Pay As You Earn (PAYE): common problems.
Refunds under PAYE or Self Assessment
If you overpay tax under PAYE or Self Assessment, you can make a claim for a refund.
For more information about claiming a tax refund for overpayments made through your job, or if you become unemployed, go to the GOV.UK website at: www.gov.uk.
If you are on strike, a refund will only be paid to you either when you leave the job or when you go back to work. You will not get a refund at the end of the financial year.
For more information about wrong tax codes, see Pay As You Earn -.(PAYE): common problems. For more information about how benefits are taxed, see Tax-free and taxable income.
Refunds following a death
An overpayment of income tax may arise following a death. For more information about claiming back income tax on behalf of someone who has died, go to the GOV.UK website at: www.gov.uk. If a refund of tax is made, it is counted as part of the estate of the person who has died.
Refunds of tax on savings interest
You may pay too much tax on savings interest. If so, you can make a claim for a refund. You can get more information about getting interest tax-free and claiming a refund on tax overpaid on interest at the HMRC website. Go to: www.hmrc.gov.uk.
Refunds of tax overpaid on pensions or on cashing in small pensions
You may pay too much tax on your pension or when you cash in a small pension. You can get more information about claiming a refund on tax overpaid on a pension at the GOV.UK website. Go to: www.gov.uk
Time limit for claiming a tax refund
The time limit for claiming a tax refund is four years from the end of the tax year for which you overpaid tax. A tax year runs from 6 April one year to 5 April the following year.
If you think you might be entitled to a refund, claim now so that you don’t lose the right to claim.
You can find out how to claim a refund on the GOV.UK website at www.gov.uk.
Interest on refunds
HMRC must pay interest on a tax refund if the repayment is made after 31 January following the end of the tax year in which you overpaid the tax.
For more information about the rates of interest go to the HMRC website at www.hmrc.gov.uk.