When someone pays more tax than liable, there is an overpayment of taxes. Many don’t even realize they are overpaying taxes since they aren’t aware of the income tax benefits. If that’s the case and you’ve submitted your tax return, HRMC would send your repayment. If you haven’t submitted your tax return, there are other ways to claim back the excess tax paid.
Situations where people are likely to overpay taxes:
Employment income:
If you pay tax through the PAYE system for receiving employment income, you could be overpaying tax for several reasons. The HRMC is likely to refund the extra amount at the end of the year but there are times they don’t get the calculation right. Find out the possible reasons that result in overpaying and use an online tax refund calculator to calculate the amount.
Employment expenses:
An employee can claim a tax refund for certain work-related expenses. For instance, if the tools you use at work were purchased from your pocket and your employer hasn’t reimbursed it yet, you are eligible for tools tax back. Using the receipt of your purchase, you can get the help of tax and accounting experts like Tax Rebate Services.
They are one of the top accounting services in the UK and their experienced accountants will help you claim a refund. Employment expenses that are claimable include:
- Tools
- Clothing
- Mileage
- Capital allowances
- Professional fees and subscriptions
Termination of employment before the end of the tax year:
If you have lost your job before the end of the tax year, you don’t have to wait until the end of the next tax year to claim tax refunds. The amount you are due varies depending on other factors including your current employment state and how much you earned until you lost your job.
After leaving the UK for other career opportunities:
Even after you move out of the UK to work abroad, you can claim a refund for overpaid tax. Follow these steps:
- Complete form P85 to HMRC
- Affix part 2 and part 3 of P45 along with P85 form
- Make a copy of both the completed forms
- Send both the forms to HRMC by registered post
If the HRMC finds you eligible for a tax rebate, you’ll receive the amount by bank transfer or post. In case you continue to receive income from a job in the UK, instead of completing form P85, you’ll have to complete a tax return for the year of your departure. If you are facing any complications or have any queries you can reach out to HMRC.
Pension income:
Those who are receiving a pension and paying tax for it under the PAYE could be overpaying. Contact the HRMA regarding the tax rebate.
There could be situations where even after you file tax returns your refund due amount isn’t credited to you yet. The refund can take anywhere between a few weeks and a few months to arrive due to the security checks involved. IF you want to speed up the process you can contact HRMC asking for an update.