How to Claim Tax Back

Paying tax is a fact of life for most of us, but it's surprisingly easy to pay too much and leave yourself out of pocket. Here's how to claim tax back from HMRC.

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If you think you've paid too much tax getting your money back is should be a top priority.

Here's how to find out if you've paid too much tax and what you need to do to get your money back as quickly as possible:

Have I paid too much tax?

Your employer or pension provider use the tax code you're allocated by HMRC to detemine how much tax you should be paying. 

If your tax code isn't correct you could be paying too much or too little tax so it's important to check they have it right.

Read our guide: Are You Paying too Much Tax? if you need help finding out if you've made an overpayment.

Is it free to claim tax back?

Yes, it's completely free to claim tax back from HMRC.

There are companies that offer to reclaim tax overpayments on your behalf in exchange for a cut of your rebate. However, because it is relatively easy to claim tax back yourself you should only consider using one if you don't think you'll claim on your own.

The exception to this is if you have very complex tax affairs, in this case it's likely to be sensible to get advice from a qualified accountant.

Here's how to get started getting your tax back and keep 100% of your money.

I've paid too much Income Tax

Income Tax is taken from the money you earn each year.

Everyone can earn a certain amount of money before paying tax, this is called your annual personal allowance.

There are currently three levels of personal allowance for the 2014-15 tax year:

  • Under 65s can earn up to 10,000
  • Anyone aged 65-74 can earn up to 10,500
  • Anyone aged 75+ can earn up to 10,660

If you earn over a set amount, your tax free personal allowance is gradually withdrawn.

However, although this system works relatively well for someone working in one full time job with a fixed rate of pay, if you don't fit that bill it's easy to end the year having paid too much tax.

Reclaiming overpayments through PAYE

Most people pay Income Tax through the PAYE (Pay As You Earn) system, which deducts tax  from your salary before it is paid into your account.

PAYE uses a tax code to calculate how much tax you should pay and generally works well if you are paid the same amount every month.

However, if your pay fluctuates you could end up paying more tax than you need to.

Equally if you are not employed for the full 12 months of the year, perhaps due to the seasonal nature of your job, unemployment or study, you may not get the full benefit of your personal allowance and as a result pay too much Income Tax.

You can use the online HMRC Tax Checker to get an estimate of whether you've paid too much tax and if it would be worthwhile asking for a rebate.

If you think that you've paid too much tax through your job this year you will need to contact HMRC to ask for a tax assessment and to claim a refund - you will need your pay slips and National Insurance details to hand.

If you think that you may have paid too much Income Tax in previous years you may still be able to claim a refund, you have 4 years to make a backdated claim.

To reclaim tax for earlier tax years you will need your P60 and P45 forms and details of your employment and benefit history for the relevant tax years. Once you have all your details, contact your local tax office and they will review your claim and send you a refund by post.

Reclaiming overpayments through Self Assessment

If you think you've overpaid tax through your Self Assessment tax return you can make a claim for a refund in much the same way as through PAYE.

You have 4 years to submit a claim for a Self Assessment refund and cannot claim for overpayments beyond this date - check the deadlines by visiting the HMRC website.

If you want to claim a refund, or correct a mistake on your Self Assessment tax return within 12 months of submitting it you can complete an amendment. This means either writing to the HMRC detailing the changes, or completing an amendment on the HMRC website.

If you need to claim for a refund from a Self Assessment made over 12 months ago you will need to make a claim in writing and include the following information;

  • the tax year of your overpayment
  • why you've paid too much tax
  • evidence of the tax that's been paid, a copy of the return etc
  • a copy of your signature
  • how you would like to receive any repayment due

For more information on how to correct your Self Assessment tax return visit the HMRC website or contact the HMRC Self Assessment Helpline.

I've paid too much tax on my pension

If you pay tax on your personal, company or state pension through the PAYE system there is a chance that you could have paid too much.

This could be because you have been allocated the wrong tax code, because your entitlement to benefits has changed or for a number of other reasons.

Reclaiming the tax you pay on your pension is similar to reclaiming Income Tax from employment; you will need your payslips, P60 & P45 forms and full information relating to your pension and benefit payments.

You will then need to contact HMRC and request an assessment of your tax contributions and any repayment due will be sent to you through the post.

For more help reclaiming your tax on your pension visit the HMRC website.

I've paid too much tax on my savings

Most standard savings accounts automatically deduct tax from you interest before the money is paid into your account.

Unless your money is held in an ISA or you have informed your savings provider that you don't pay tax by completing an R85 form, it's likely you are paying tax on your savings interest.

If you shouldn't be paying tax on your savings, perhaps you earn below your annual Personal Allowance, you can reclaim the tax that has already been deducted from your account.

You have up to 5 years to reclaim tax paid on savings interest, which you can do by completing a R40 form and contacting your tax office.

For more help on reclaiming tax paid on your savings, contact the Leicester & Northans Claims Office.

I've stopped working can I get my tax back?

If you have worked for several months of the year and have stopped then there is a good chance you will have paid too much tax.

If you have no plans to claim Job Seekers allowance or to work again this financial year you can complete a P50 form to reclaim your tax so you receive the full benefit of your personal allowance.

I've paid too much National Insurance

If you have had several jobs in a year there is a chance you may have paid too much National Insurance as well as too much Income Tax,. If this is the case then in certain circumstances you may be able to claim back your overpayments.

How do I make a claim?

The type of National Insurance that you need to reclaim will dictate how you should complete your claim for a refund.

You can check where to write to write to and which forms you will need to complete by visiting the DirectGov website.

How long do you have?

There is no time limit on when you can reclaim overpaid National Insurance contributions if:

  • you have worked in two jobs and made contributions on both
  • being both employed and self employed resulted in the overpayment
  • you haven't paid enough voluntary contributions to count for a qualifying state pension year

If you have wrongly paid or overpaid National Insurance for any other reason there is usually a six year time limit on claims.

The only other exception is when your self-employed earnings fall below the annual small earning exception limit - in this case you must apply in writing for a refund by 31st January of the following tax year.

Responses

add your response here

Does anyone know the position if you have sold shares in the USA, made a gain there, and paid tax BOTH in the US AND in the UK? I've heard about a W-8BEN - but don't know what to do with it? Also, how long have I got before I cannot reclaim the tax?

by chunter177, 24 Nov 2012
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