July 29, 2016

Overpaid tax last year- how to claim it back


The 2015/16 tax year ended on 5 April 2016. If you have overpaid tax for that year, what do you need to do to make sure that you get it back?

A tax overpayment may arise for a number of reasons. Maybe you stopped work part way through the tax year, or your tax code was wrong. Maybe you haven’t claimed reliefs that you were due, or tax was deducted from your savings income and you were a non-taxpayer.


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 using the calculator on the HMRC website at www.gov.uk/check-income-tax.

You should receive a tax calculation (P800) from HMRC by the end of July. This will show whether you have paid too much tax. You should receive the refund from HMRC within 14 days of receiving your tax calculation. You shouldn’t have to do anything, but you may want to chase it up if the refund is not received within the 14-day window.

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.


Stopped work

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 think that you have overpaid tax for 2015/16, you may not want to wait until January 2017 before filing your tax return. When you complete your tax return, enter details of the bank account to which you want a tax refund to be made. Once the return has been filed, your self-assessment account will show that you have overpaid tax. Log on to your account and select the `request a repayment option’.


Savings income

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.


Don’t hold your breath

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 HMRC. If you cannot wait that long and the refund has not been received, chasing them may pay dividends.

Please get in touch with us at Inform if you need further advice on how to claim back overpaid tax or for any other tax related matters.  


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Read more of Inform's tax blogs:

Salary sacrifice- still worthwhile?

A trivial matter- what is a trivial benefit?

Reclaiming tax once director's loan repaid



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