Claiming back overpaid tax
The 2015/16 tax year ended on 5 April 2016. And many people will have overpaid tax for the year.
A tax overpayment can arise for a number of reasons. Maybe you stopped work part way through the tax year, or your tax code was wrong, or you had more than one job or pension. Maybe you haven’t claimed reliefs that you were due, for example the transferable married couples’ allowance, or tax was deducted from your savings income and you were a non-taxpayer.
If you have overpaid tax, how do you get it back?
The tax code is fundamental to the operation of the PAYE system. If your tax code is wrong, the wrong amount of tax will have been deducted from your pay. This may result in you paying too much tax. You can check how much tax you should have paid by asking us or using the calculator on the HMRC website at www.gov.uk/check-income-tax.
HMRC do check employee pay records and you should receive a tax calculation (P800) from HMRC by the end of July if you have overpaid tax and by the end of September if you have under paid. If you are due a refund this should be received within 14 days of receiving your tax calculation. The P800 will be sent to you by post, do not reply to any emails which ask you to claim a refund of tax.
If you have not received the P800 or do not want to wait for it to arrive, you can claim online by logging in to your HMRC account. You can also claim a refund by writing to HMRC.
Because of the way the PAYE system works, if you stop work part way through the tax year and do not work for the rest of that year, you may overpay tax as you will not have received the benefit of your full personal allowance during the year. You can claim a refund by completing form P50 (see www.gov.uk/government/publications/income-tax-claiming-tax-back-when-you-have-stopped-working-p50) if you are not going to be working for at least four weeks and are not claiming benefits.
Submit a tax return
If you are registered for self-assessment and think you have overpaid tax for 2015/16, you can file a tax return now. When you complete your tax return, enter details of the bank account to which you want any tax refund to be made. Once the return has been filed, your self-assessment account will show that you have overpaid tax and unless the amount is small, repayment should be made automatically.
If you are a non-taxpayer and tax was deducted from your savings income in 2015/16 you can reclaim it by completing form R40 (see https://www.gov.uk/government/publications/income-tax-claim-for-repayment-of-tax-deducted-from-savings-and-investments-r40) and send it to HMRC.
HMRC can be quite slow at refunding tax. They suggest on their website that taxpayers should wait five weeks after making an online claim and six weeks after making a postal claim before contacting them, though in many cases refunds are made sooner. If you cannot wait and the refund has not been received, chasing them may pay dividends, although you may have to wait for a while on the phone.