Claim Tax Refund from HMRC

HMRC work hard every year to collect the right amount of tax from UK based businesses and employees. So, when you come calling and try claiming tax back, HMRC do not give it up easily. That being said, it is not unheard of for the Inland Revenue to make mistakes and it might seem like your friends and colleagues are always receiving a tax rebate from HMRC. This often happens, and is the result of the Inland Revenue placing an emergency code on a pay cheque, if it exceeds your usual amount. These mistakes are easily rectified and can be claimed by completing a tax rebate form and sending to HMRC, who will give you your money back. If you are paying tax through PAYE then the process should be very quick, but there are many other processes involved in claiming tax back, which we will discuss throughout this post.

Self Assessment Statement

To file your tax returns in the UK, everyone must submit a self-assessment tax form. This form shows your total income, as well as the tax already paid through PAYE. If you are self-employed, then the form shows your bi-yearly payments. When you send your returns to HMRC, they calculate your tax liability and issue a “Self Assessment Statement” which shows whether you are underpaying or overpaying your taxes. If you are required to submit any further information, you must complete that yourself.

P800 Tax Calculation

The P800 is a document issued by HMRC that shows income details, allowances & tax reliefs for the tax year. It shows the calculation of the total income tax you have paid and what you are still liable to pay. If you receive this document, then HMRC thinks that you have not paid the right amount of tax. There are three outcomes to the P800 Tax Calculation:
  • You have paid the right amount of tax
  • You have paid too much tax
  • You haven’t paid enough tax
The P800 provides HMRC with information about your employer, tax returns, pension providers etc. HMRC analyse all your tax information and decide whether you have paid the correct amount of tax. If you have underpaid the tax, then your tax code will reflect underpayment for next tax year. If you are dissatisfied with the P800 for any reason, or you do not agree with its calculations, you must inform HMRC right away. If you have paid too much tax and you are due a refund, the P800 letter informs you what to do next. You will usually have to fill in the form online and HMRC will send you a text with the rebate amount.

When Can I Claim a Tax Refund?

Most people think the amount of tax they paid is correct and no further action is needed. If one of the below situations applies to you, then you could have contributed too much tax and be due a rebate from HMRC:
  • You only worked for part of a year
  • Your employer has been using the emergency BR tax code
  • Your employer is using the wrong tax code
  • Your pension providers informed HMRC of an incorrect amount
  • You are a part time worker and earning less than the personal allowance
  • Second job used the wrong tax code
There are many reasons why people pay too much tax, which is why it’s better to double check your self-assessment statement every year properly before submitting it to HMRC.

Calculating Emergency Tax Implications

If you didn’t receive a tax code at the time of employment, you will be issued an emergency tax code. This could result in you paying too much tax in the first few months, if you are paying your tax through PAYE. Once you receive your real tax code, your employer will calculate the tax again and sort out this overpay issue and provide your rebate for the previous overpayment.

I Earn Less Than My Tax Code

In the UK, you are permitted to earn £11,500 before you must pay tax on your earnings. If you earn less than this amount, you should not be paying tax. To prove you earn less than the minimum taxable amount, you can provide your 1150L code. This code indicates that you should not pay tax on any wages, providing the value stays below the £11,500 per annum limit.

Have I Paid Too Much Tax?

In many cases, you may use allowable expenses that you can claim against your income. You must inform HMRC about it to ensure that your tax code is correct. If, after receiving your P60 and performing calculations, you found that you have paid too much tax to HMRC, you can call HMRC and discuss the details with them. These types of enquiries are handled by HMRC representatives every day. They do make mistakes but are happy to make things right, so do not hesitate to get in touch with them. After all, it is your money!

Tax Refunds & Students

Many students earn a small amount of money during the year. If your income is less than £11,500 in the current tax year with tax deducted at source, you can claim for a tax refund. Tax deductions are made because of the following reasons:
  • Your employer must tax you if you are working for a full calendar year
  • You are taxed based on an emergency tax code
As we mentioned previously, either complete a self-assessment form with the help of a recent P45 or P60, or alternatively, you can call your local tax office. You will easily find their telephone number & address on any correspondence you have received from them.

How Nomisma Self Assessment Software will help you in Claiming Tax Back?

Nomisma Self Assessment Software is very useful for small businesses, accountants, contractors, freelancers, agents, non-profit and charitable organizations as it directly submit self assessment returns to HMRC. It provides a comprehensive overview of your business and submits the correct tax information to HMRC. It helps in following situations –
  • If you overpaid tax and your refund is due, it helps in claiming a tax refund
  • If you underpaid tax, our software and your accountant will advise you how to pay the remaining amount
  • Submitting unlimited self-assessment returns directly from the system to HMRC
  • Confirming whether HMRC has accepted or rejected your return
  • Simplifying client engagements with email/SMS templates and scheduled e-mails
  • Uploading & maintaining all critical client documents and attaching it to their accounts for easy access
  • Accessing a wide range of system generated reports
Take advantage of our free 14-days trial period. If you would like more information about how Nomisma can help your accountancy practice, just call our experts on +44 (0) 20-3021-2326 or e-mail us at [email protected]uk