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.
Tax deducted under Pay As You Earn (PAYE)
When you move between jobs, the P45 process should hopefully mean that your PAYE code is carried over from one employer to another so that, assuming the code is correct, you pay the right tax across the whole tax year.
This does not always work, for example where:
- you have not received or lose your P45;
- the new starter 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 the top of your letter clearly with ‘repayment claim’ so that HMRC prioritise it on receipt.
When you write to HMRC, use the tax office address of your current employer. If you do not have an address for your employer's tax office then you can use the address on HMRC’s 'contact us' page.
Your letter, should:
- 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;
- be signed and dated in ink.
Keep a copy of your letter and 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?
You have four years from the end of the tax year to claim a refund, as shown below. If a claim is not made within the time limit you will lose out on any refund that may be due.
Tax year 2009/10 (year ended 5 April 2010) - claim by 5 April 2014
Tax year 2010/11 (year ended 5 April 2011) - claim by 5 April 2015
Tax year 2011/12 (year ended 5 April 2012) - claim by 5 April 2016
Tax year 2012/3 (year ended 5 April 2013) - claim by 5 April 2017