Every year more than 3.5 million people pay too much tax in the UK. Tax overpayments can occur without the taxpayer or HM Revenue & Customs (HMRC) knowing, which is why it’s important to be aware of how it happens. These are some of the most common reasons HMRC could owe you money and how you can get it back.
You were placed on the wrong tax code
It’s not often that you’ll find yourself on the wrong tax code, but it does happen. Tax codes can shift year-on-year as a result of changes to your income, your work circumstances or even your annual personal allowance.
Your tax code consists of a combination of numbers and letters and is used by your employer to work out how much income tax to deduct from your pay or pension. The amount of tax you pay is dependent on your income, how much tax you’ve already paid and your personal allowance.
You may be on the wrong tax code for several different reasons, such as:
- You’ve recently changed jobs
- You’ve started a second job
- Your state benefits have changed
- Your company benefits have changed
- You are receiving additional income that isn’t taxed, such as rental income
You must contact your tax office if you find your tax code is wrong. They will tell you if you’ve overpaid on your taxes. If you have been taxed incorrectly you can submit a claim for a tax refund.
Paying for the maintenance of your work uniform and job-related tools
You can’t claim for the initial cost of purchasing a uniform or tools for your job, but you can claim tax relief for the cleaning, repairing or replacing of it. Your uniform can consist of a t-shirt with a company logo or a full uniform such as that of a pilot, nurse or police officer.
Knowing what type of claim to make
There are two types of claims for this sort of expense. You can either claim a standard flat rate or the actual cost of the item. A flat rate expense is the set amount decided on by the tax office. If you choose to claim for the amount that you paid, you will need to keep your receipts as proof.
See also: HMRC demands that these UK expats submit tax returns
Using your vehicle for work
If you use your car to travel to different locations as part of your job, you may be able to claim a mileage tax rebate. You can make a claim whether you use your car daily, weekly, monthly or even once a year.
The mileage tax rate covers the cost of owning and running your vehicle. The amount you can claim for depends on whether your vehicle has been bought or leased with your own money or owned or leased by your employer.
What can you claim for?
You can claim tax relief for the following expenses:
- Travelling to visit clients
- Fuel purchased while driving a company vehicle
- Travelling between offices
- Carrying passengers for work purposes
You may only claim for business travel expenses. Commutes to and from your permanent place of work are not eligible.
You stopped working in the middle of a tax year
The tax that is deducted from your salary is calculated with the assumption that you’re going to be employed for the total duration of the tax year. If you stopped working in the middle of the tax year, it is possible that you paid too much tax. This type of tax rebate only applies if you did not receive any other income for the rest of the tax year.
Find out if you're eligible for citizenshipEmail our expertsLeave a comment below
Think you’re due a refund? Here’s how to make a claim
To make a claim, you’re going to need your P60 and P45 tax forms. Depending on your employment circumstances, you’ll either receive a P60 tax form or a P45 tax form from your employer.
P60 tax form
You’ll use your P60 tax form to claim any overpaid tax. It contains information on the tax you’ve paid in the tax year. The tax year runs from 6 April to 5 April the following year.
P45 tax form
You’ll receive a P45 tax form if you’ve worked for an employer for only part of the tax year. This form indicates how much tax you’ve paid up until your last working day. You should receive your P45 from your employer on your final day of employment.
Find out how much tax you’re owed
Once you have your P60 or P45 form, you can begin the process of claiming back your overpaid tax. You’ll first need to work out how much you’re owed. You can do this manually or the much simpler way is to use an online tax refunds calculator, which will give you an estimate of your tax refund.
Want to get your refund sooner?
The process of claiming back tax can be quite admin-heavy. Don’t let this get in the way of you getting what’s owed to you. With the help of a tax refunds agent, this can all be sorted out for you. A tax refund agent will also ensure that you get your full tax refund sooner and hassle-free.
We are one of the largest registered tax agents in the UK, having lodged over 250,000 successful tax refund claims for our clients. Complete our online tax refund claim form and we’ll help you get your full tax refund back.
We are a professional services company that specialises in cross-border financial and immigration advice and solutions.
Our teams in the UK, South Africa and Australia can ensure that when you decide to move overseas, invest offshore or expand your business internationally, you'll do so with the backing of experienced local experts.