How can I get a refund for PAYE overpayments on wages or pensions?

 Tax fundamentals

This page explains what you should do if you have overpaid taxes on your wages or pension.

When was the last time I paid tax on my salary or pension?

You may pay too much tax if you get a job or pension income and pay tax under the Pay As You Earn (PAYE) system. This is due to a variety of factors.

When am I likely to pay too much income tax on my job?

If any of the following apply to you, you may have paid too much tax:

  • For a period, you had an emergency tax code because you started a new work.
  • Your boss was using the incorrect tax code.
  • You only worked for a portion of the tax year.
  • You worked multiple jobs at the same time.
  • You're a student who only works during the summer.
  • other income that HM Revenue & Customs (HMRC) has lowered through your tax code.
  • For the remainder of the tax year, you ceased working and had no taxable earnings or benefits.

When is it possible that I will overpay income tax on my pension income?

If any of the following apply to your pension income, you may have paid too much tax:

  • The tax code used by your pension provider was incorrect.
  • Your taxable earnings have decreased.
  • Your tax code has an error in the amount of state pension.
  • You had more than one PAYE source of income, such as multiple pensions.
  • On a pension lump amount, you paid too much tax.

In some cases, HMRC's P800 tax computation system may mean you don't need to claim a refund because HMRC may automatically provide one. If you have overpaid tax and have not received a P800 tax computation from HMRC, you must file a claim for a tax refund. This is explained further down.

What does the P800 tax calculation entail?

Throughout the tax year, your employer or pension provider reports to HMRC how much money you have earned, how much tax you have paid, and the value of any in-kind benefits you have received. Banks and building societies are also reporting interest paid to you on accounts in your name to HMRC.

HMRC uses this data to do an automatic reconciliation at the conclusion of each tax year. This means they put all of the information they've gotten together to figure out if you've paid the correct amount of tax. HMRC will give you a P800 tax computation if they believe you have not paid enough tax (in some cases they may send a Simple Assessment). This calculator will determine how much tax HMRC believes you should have paid. P800s are typically mailed between June and October following the end of the tax year.

HMRC may not have all of the information they need to compute your tax accurately, or they may have wrong information, therefore you should always double-check your P800 tax computation.

If you believe you paid too much tax but did not receive a P800, check the topic How can I claim a refund after the tax year ends and for previous tax years?

What should I do if my P800 indicates that I am due a refund?

If your P800 calculation indicates that you are due a refund, it should also indicate whether you can get your refund via online bank transfer, using your Personal Tax Account, or by receiving a check from HMRC. HMRC should issue you a cheque if you can collect your refund online but do not do so within 45 days.

It can take up to 60 days for a cheque to be issued. Before obtaining a refund through check, verify sure HMRC has your current address.

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