How to claim & apply for a Tax Rebate

We have outlined how to claim and apply for a tax rebate if you discover that you have overpaid your tax.

When this occurs, money will typical be transferred back into your account that you have paid your tax from.

This will usually be for the previous tax year.

Let’s look at how this works and what you need to be aware of.

Who Is Entitled To A Tax Rebate?

It’s not particularly likely that you will automatically receive a tax rebate if you are employed.

When you are employed, the business will be responsible for filing tax, and you will not have to complete your own tax return.

As such, the government will typically assume that you are being taxed the correct amount and a rebate will not be provided.

Examples of tax rebates

In contrast, it’s quite common for people handling their own taxes who are self-employed to be granted a tax rebate because they paid too much one year.

This could be due to a change in their expected income which is particularly common for freelancers.

However, you could be entitled to a tax rebate if you have ever paid too much tax for your current or previous job.

You might also find you have paid too much tax on :

  • Foreign income
  • Pension payments
  • Costs for your job
  • Savings interest
  • Redundancy payment.

You might also pay tax through the PAYE or pay as you earn system.

On occasions, this can cause you to pay too much tax.

Why you may be entitled to a tax rebate

There are various reasons why this could occur and why mistakes are made here.

For instance, changing from full to part-time work can cause an error.

You might also find you have a problem if you are a student who is only working through the holidays.

Multiple jobs ?

People with multiple jobs may also find that their tax payments are incorrect and it could be a mistake caused by your employer using the incorrect tax code.

Or, you could be on a pension income and have paid too much tax.

This can again be due to the wrong tax code being used, or it might be due to a change in your income.

Further complications can arise if you have more than one pension or you have a pension lump sum that you use through the year.

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What Are The Criteria For A Tax Rebate?

For the UK government tax system, the HMRC will use the information provided by you, your employer or your pension provider to find out how much you have worked or earned, and how much you should have paid in tax.

This will typically be an automatic process, and at the end of the year, individuals who have been found not to have paid the right amount will be sent a P800 tax calculation form.

P800 Tax Calculation Form

This will provide information on how much the HMRC thinks you should have paid in tax and why.

This may also take the form of a simple assessment.

Check this form carefully as it’s possible that the HMRC have not received the information.

If that’s the case, then you will need to dispute the calculation.

Disputing tax calculation

If you have been found to have paid too much in tax, the P800 form will tell you how you can get your rebate.

This will usually involve an online applicate, a cheque in the post or access through your personal tax account.

If you do not receive a P800 form by September of the tax year and you believe you have paid too much, check what you have earned using the government tax calculator found online.

This will tell you if you have overpaid and are entitled to a refund.

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How To Claim And Apply for a Tax Rebate?

If you think you have paid too much and you are entitled to the refund, claiming it back will depend on how you pay your tax.

Self-employed individuals will pay through a self-assessment.

If you fit this category, then you can access your personal tax account online through HMRC.

You will find there a link that will help you claim back tax if you think you have overpaid.

This can be as simple as filling in an online form of what you have overpaid.

You might also find that you already have a message here that you have overpaid.

Be aware though, if you pay your tax early, this will be marked as an overpayment until the time it is due.

Once you discover that you have paid too much in tax and you haven’t received a P800, you will have two options on how to claim the money back.

Again, you might have a person tax account online, and this is often the easiest and simplest possibility.

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Telephone HMRC

If you would rather speak to someone on the phone, you can ring HMRC, and they do have a helpline for employers as well as individuals.

Be aware though that the lines are often incredibly busy and it is best to ring early in the morning as soon as they start accepting calls.

Before you ring, make sure that you have all the information and details they will ask for.

This will include :

  • Your NI number
  • Address
  • Date Of Birth
  • Information from your PAYE scheme
  • Pension provider

You can find their reference number at the top of your payslip. They will also ask for your earnings for the tax year that you are disputing.

Do make sure that you note down details from the call yourself including who you spoke to, what was said and when the call occurred.

This can help you follow up if you receive no word after the call ends.

You might find after speaking to HMRC they request further information.

If this is necessary, they will contact you directly and ask you to send it to them.

If you are asking for a refund after the end of the tax year or asking for a refund from the previous year, you can either proceed through your personal tax account.

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Write to HMRC

Or, alternatively, you write to HMRC under the topic of ‘repayment claim.’

Do make sure that this is included clearly to ensure that your claim is taken seriously and indeed prioritised.

Failure to do this may cause your claim to be delayed.

You’ll find the address to use for HMRC on the government website or any letters that they have previously sent to you.

If you are writing a letter, do make sure that you include all your personal details and your NI number.

You should also make sure that you detail as much relevant information as possible such as :

  • Employment history
  • PAYE references,
  • Dates you were employed
  • How much you were paid and anything else.
  • Copies of payslips can be incredibly useful as well.
  • Get proof the letter was sent with proof of postage.

This will once again allow you to correctly file a dispute where necessary.

Do be aware that there are often time limits that you must adhere to if you want to make sure you get your tax rebate.

You usually have four years after the tax year ends to claim money owed back for that year.

This is useful as rather than looking at one year, HMRC will check all four.

As such, you might be able to get a lot more back than you bargained for.

You might think that HMRC will not pay a rebate if you are too late making a claim.

However, this is not the case at all.

Extra-statutory Concession B41

Indeed, it’s possible that you can fall back on a rule referred to as Extra-statutory Concession B41.

This will allow them to pay back tax owed from earlier years.

This will only occur if the HMRC or a similar government department made an error that caused an issue with your tax.

Do not look to claim if it was an error that you made on a self-assessment form.

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How Long Will It Take?

The length it takes will depend on how you decide to claim your rebate.

If you claim online, you will be able to get the money back in your account in five days.

Alternatively, it can take up to forty-five days to get a rebate, after your rebate has been approved.

This will be the case if you choose to wait for the government to send out a cheque.

As for how long it will take for them to decide to offer a rebate, this will typically depend on the information provided.

It may take a few days or a couple of months before your claim is approved.

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How Is A Tax Rebate Paid?

If the government provides a rebate with a P800, then you can expect a cheque in the mail.

If you sort it yourself online and make a claim, you’ll see the money go directly back into your account.

If it is through the PAYE system, you may find your refund impacts the amount you pay in tax for the following year.

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Do you think you are due to a tax rebate?

Get in touch with Universal Accounting today, and we can help you navigate what can be quite a tricky process.

We’ll make sure you get the money back you are owed from HMRC.

Contact us