Claiming Tax Back
Sometimes the Inland Revenue gets it wrong or puts you on an emergency tax code and you need to put in a tax claim tax rebate form to get a refund from HMRC.
Don't worry though because it's all very straight forward especially if you have been claiming the correct allowances or pay tax via PAYE.
Self Assessment Statement
Everyone in the UK has to submit a self assessment tax form which shows total income and the tax already paid either through PAYE or if you are self employed through your half yearly payments on account.
If you send it in before September each year HMRC will calculate your tax liability themselves and issue you with a statement showing if you have under paid or over paid tax. If you are due a refund then they will automatically attach a cheque to your self assessment statement (form SA300) and you can deposit that into your bank account. It really is that easy.
Calculating Emergency Tax Implications
If you haven't yet got a tax code you'll be issued an emergency tax code (see tax codes explained for more on tax codes and what an emergency tax code is) - this may result in you paying too much tax in the first few months if you are on PAYE but once you receive your real tax code your employer will recalculate your tax and if you have paid too much it will be sorted out that month and any rebate for overpayment will be made good in that months payment.
I Earn Less Than My Tax Code
In general everyone gets the tax free 647L code meaning you can earn up to £6,475 before paying tax in the current year and should receive that tax code which you need to pass onto your employer. If you are not employed but simply have interest income and the basic 20% tax is being deducted by your bank then you can a) either complete a self assessment tax return and claim it back then or b) complete the form R85 and send it into the inland revenue so that tax is not deducted at source (you can earn up to £2440 and just pay 10% tax - of course the tax regime in the UK is ever so complicated so either put everything in a self assessment tax return and get HMRC to make all the calculations for you, employ and accountant or have a look at the directgov website and try and work it out yourself (sorry, it's very complicated at this level).
Have You Paid Too Much Tax ?
In many cases you may have some allowable expenses that you can claim against your income but of course you need to let HMRC know about all of these and ensure that your tax code is correct so that everything can be taken into account at source.
If at the end of the tax year you have received your P60 and done some calculations and believe you really have paid too much tax for one reason or another then you can telephone your local HMRC office and discuss the details with them. They are a friendly bunch and deal with these types of enquiries each and every day. HMRC do make mistakes and are happy to put things right if required.
Tax Refunds and Students
Many students earn very little and if you have earned less than £6,475 in the current tax year but have been taxed at source then it's quick likely that you have a claim for a tax refund. This is because it's likely you will have been taxed too highly or taxed at the beginning of a job where the employer and the tax office believe you are going to work a full year and tax each week or month's earning on this basis. Again, as with the advice above, either complete a self assessment form either using a recent P45 or P60 and/ or telephone your local tax office (the telephone number and address will be found on any correspondence you have received from them).