How do I claim back tax I have overpaid through PAYE on wages or pensions?
This section looks at what to do if you have paid too much tax on your wages or pension and what the time limits are for making a claim.
We also look briefly at HM Revenue & Customs’ (HMRC) P800 tax calculation system, which may mean you do not need to claim a repayment, as HMRC might issue repayment automatically. If you have not received a P800 tax calculation from HMRC, and you have overpaid tax, you will need to make a claim for a tax repayment.
What is a P800 tax calculation?
Your employer or pension provider gives HMRC details of how much income you have received, how much tax you have paid and the value of any benefits in kind you have received during the tax year.
Using this information, HMRC carry out an automatic reconciliation at the end of each tax year. This means that they put together all of the information they have received to work out whether or not you have paid the right amount of tax. If HMRC think you have not paid the right amount of tax, they send you a P800 tax calculation. This calculation will show you what tax HMRC think you should have paid.
You must always check your P800 tax calculation carefully, as HMRC may not have all the information they need to calculate your tax correctly, or they may have inaccurate information.
If HMRC think you have overpaid tax, they will send you a repayment of tax automatically – you do not need to make a claim.
If HMRC think you have not paid enough tax, they will write to you explaining that they intend to collect the underpaid tax through your tax code or telling you how you can repay it to them.
How do I claim a refund for the current tax year?
If you receive employment income or pension income and pay tax through the Pay As You Earn (PAYE) system you may sometimes pay too much tax. There are various reasons for this.
When might I overpay income tax on employment income?
You might have paid too much tax if:
- you started a new job and had an emergency tax code for a while;
- your employer was using the wrong tax code;
- you only had a job for part of the tax year;
- you had more than one job at the same time;
- you are a student and you only worked during the holidays;
- other income which HMRC tax through your tax code has reduced;
- you stopped working and had no taxable earning or benefits for the rest of the tax year;
- your circumstances changed, for example, you changed from full-time to part-time work.
When might I overpay income tax on pension income?
You might have paid too much tax if:
- your pension provider was using the wrong tax code;
- your taxable income has reduced;
- the amount of state pension in your tax code was wrong;
- you had more than one source of PAYE income, for example more than one pension;
- you paid too much tax on a pension lump sum.
If you think you have overpaid tax through PAYE in the current tax year, before the end of the tax year tell HMRC why you think you have paid too much. It is probably best to telephone them initially and the helpline for individuals and employees can be found on the GOV.UK website.
Before you telephone HMRC, you will need to gather together:
- your personal details – such as your full name, address, date of birth and National Insurance number;
- details of each of your employers or pension providers – their PAYE scheme reference number, which should be shown on your payslip, or ask your employer or pension provider for it;
- estimates of your earnings and pensions from each source for the current tax year.
Make sure you keep a note, in a safe place for future reference, of:
- the date and time of the phone call;
- the name of the adviser you spoke to; and
- what was said by both you and the HMRC adviser.
You may need to send in more information to support your claim and if so HMRC will let you know what paperwork you should supply.
Once HMRC process your claim it might be necessary to issue you with a new tax code, meaning any refund will be added to your wages or pension and the amount will generally be paid automatically through the payroll. This will result in a lower tax deduction or a tax refund through PAYE.
If the repayment is due towards the end of the tax year and you have already received your final pay for that year, you may have to claim a refund directly from HMRC or what for the P800 process to happen.
How do I get my emergency tax back?
There is information on what to do if you have had an emergency tax code during the tax year in the ‘employed section’.
There is information on what to do if you have stopped work part way through the tax year and are not going to have a continuing source of taxable income in the 'employed section'.
How do I claim a refund after the end of the tax year and for previous tax years?
If you have paid too much tax through your employment and the end of the tax year in which you overpaid tax has already passed you can make a claim for a refund. You can do this online, through your Personal Tax Account (accessed through GOV.UK), or by writing to HMRC.
If you write to HMRC, mark the top of your letter clearly with ‘repayment claim’ so that HMRC prioritise it on receipt.
You can write to HMRC using the tax office address of your current employer or the postal address on the most recent correspondence you have from HMRC. If you do not have any recent documents or letters from HMRC, use the address on the GOV.UK website.
See ‘Where can I find more information and examples?’ below for an idea of how to write your letter and what you might include. But generally 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.
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);
- the sort code; and
- the account number.
HMRC might want to make additional security checks if you request repayment into an account which is not in your own name.
In most cases you can get back the tax you have overpaid as long as you claim on time. The time limits for claiming a refund are shown in the introduction page of this section. If you fail to make a claim within the time limit you will miss out on any refund due.
The time limits for claiming back overpaid tax are set out in the introduction page of this section.
What can I do if I am too late to make a claim for a repayment?
Claiming back tax for 'closed' tax years - Extra-statutory Concession B41
If you think you have overpaid tax in tax years that are ‘closed’ to reclaims, there is a rule known as Extra-statutory Concession B41 which can allow HMRC to repay tax for those earlier years.
This concession only applies in situations where HMRC or another government department, such as the Department for Work and Pensions, have made an error in your tax affairs and where there is no doubt about the facts of the case.
The relevant part of the concession reads as follows:
‘....However, repayments of tax will be made in respect of claims made outside the statutory time limit where an over-payment of tax has arisen because of an error by HMRC or another Government Department, and where there is no dispute or doubt as to the facts.....'
In our experience, it is rare for HMRC to grant this concession so you will need to set out clear evidence as to what the error was, which resulted in you paying too much tax.
We have produced some example letters you can use to write to HMRC regarding your own tax repayment. These are available in the following formats:
There is more information on the GOV.UK website on how to:
- claim a tax refund on your pension income;
- reclaim tax if you have overpaid through your job; and
- claim a tax refund when you stop work.