Below we summarise some common reasons why you may have paid too much tax and how, if a repayment is due, you set about getting some or all of it back.
Savings income only
Some students have no earnings but have some savings or investment income, such as interest from a bank or building society, which has had tax deducted from it.
You will need to use form R40 to claim the tax back: the process is explained under claiming a repayment.
Working in your vacations
If you leave a vacation only employment and you have signed a form P38(S) you will have paid no tax on those wages and, if they are your only income, you will not need to claim a tax repayment.
If you have not been able to complete a form P38(S) and tax has been deducted, you may need to claim some tax back. See 'How do you claim back PAYE tax?' below.
Tax deducted under Pay As You Earn (PAYE)
When you move between jobs, the P45 process should hopefully mean that your correct PAYE code is carried over from one employer to another so that you pay the right tax across the whole tax year. But this does not always work, for example where:
- you have not received or lose your P45,
- the P46 process has broken down and you are on the wrong tax code;
- you have more than one job and have been taxed at basic rate on one or more of them but you have ‘spare allowances’ to use up;
- you stop working before the end of the tax year so, even if you have been on a ‘cumulative’ code, you will not have received the full benefit of your allowances at the end of the year.
For jobs which are continuing at the end of the tax year, you should receive form P60 from each of your employers – the end of year form which summarises your earnings in the last tax year.
If you received any employment-related benefits from an employer(s), you might also need form P11D from them. Have a look at our section on employment expenses and benefits.
The answer depends on timing.
Before the end of the tax year
If you have stopped work part way through the tax year and are not going to have a continuing source of taxable income, for example, you are not intending to go back to work within four weeks or claiming a state benefit, you should be able to claim an in-year tax repayment using form P50.
You cannot use the P50 if you are claiming, or intending to claim a state benefit such as Jobseeker’s Allowance (JSA).
If, for example, you leave college in June, having done paid work for a period during this tax year, and you do not get a job but start to claim JSA make sure you let Jobcentre Plus have your form P45 from that paid work. They will then put the details onto their computer. If you have already paid some tax under PAYE in the year, you will not get this refunded until the earlier of:
- ceasing to claim JSA – in which case your refund comes from Jobcentre Plus
- the end of the tax year – in which case, you have to liaise direct with HMRC for your refund.
After the end of the tax year
If the end of the tax year has already passed, you will need to write to HMRC. Mark your letter clearly, at the top, ‘repayment claim’ so that HMRC prioritise it on receipt.
When you write to HMRC, use the tax office address of your current employer. If your payslips show a ‘PAYE Reference’, you should be able to look up the tax office address on HMRC’s website at contact us.
In the letter, make sure you:
- give your full personal details - your name, address and national insurance number
- include as much information as possible about your employment history, for example, PAYE Reference numbers for your employers, dates of employment, how much you earned and how much tax was deducted
- enclose copies of P60s and P45s if you have them - keep the originals
- say why you think you are due a repayment;
- sign your letter in ink and date it.
When you send your letter, we also recommend that you keep a copy of it together with any enclosures and ask the Post Office for a proof of posting in case of later query.
HMRC say they usually aim to process PAYE repayments within four weeks of receipt. In some cases, HMRC will need to carry out security checks. It might help to speed up the repayment if you ask HMRC to pay it direct to your bank account. To request a direct bank transfer, include in the letter:
- the name of the account holder(s);
But be aware that HMRC might want to make additional security checks if you request repayment into an account which is not in your own name.
How long do I have to claim a repayment?
Use the links below to find out more about the deadlines for claiming different types of tax repayment:
Overpaid tax on wages or pension
Overpaid tax under Self Assessment
Have you overpaid tax on your savings income?
More information
The
Directgov website has a section for students on claiming repayments.
