The UK government offers several tax refunds and allowances to taxpayers depending on employment and personal circumstances. Sometimes you can claim the wrong amount of income tax after changing jobs or taking a break from work. This means you are eligible for a rebate or other refund.
This article is a complete guide on how to request a tax refund from HMRC and under what circumstances you can receive a rebate.
What is a tax rebate?
A tax refund is when the government returns excess tax paid by an individual or business. It occurs when a taxpayer overpaid taxes per year.
It can take the form of cash payments from the government or credits to unpaid future taxes. Tax rebates may be issued as part of a government stimulus effort or a specific tax relief program.
The UK tax year will be held from April 6th of this year to April 6th of the following year. At the end of each tax year, HM Revenue & Customs (HMRC) calculates whether the appropriate tax amount has been paid. Rebates from HMRC are usually issued automatically, but if you believe there is an overpayment tax, you can claim them.
How does HMRC calculate taxes?
When calculating your tax obligation, HMRC takes into account income sources, deductions and tax allowances. Here is an overview of the related processes:
- Determining taxable income: HMRC calculates all sources of your income, including wages, self-employed income, rental income, dividends, interest, pensions, and more.
- Allowances and Deductions: As a taxpayer, you can benefit from personal benefits. An individual’s taxable income decreases when he acquires a pension or makes a charitable contribution.
- Tax Band: The UK has adopted a progressive tax system in which different parts of your income are taxed at different tax rates. This is the basic income tax band for the 2025-2026 tax year.
- Base rate of income (20%) between GBP 12,751 and 50,270.
- Higher revenue rates (40%) above the base rate threshold between GBP 50,271 and 150,000.
- Includes additional fees (45%) for income above the higher rate threshold of GBP 150,000.
- Tax calculation: The HMRC determines taxable income and calculates the total tax owed by an individual or business after applying an appropriate billable tax rate.
- Tax credits and overpayments: If you have already paid taxes through the PAYE (Salary When You Acquired) system or have received other tax credits, these amounts will be deducted by HMRC from the calculated tax.
- Submitting a return: Self-employed individuals or individuals with more complicated tax situations may need to file a self-assessed tax return detailing their income and potential deductions.
- payment: As determined by the HMRC, you are liable to pay taxes. There are deadlines that apply based on the taxpayer classification you apply (employment, self-employed, or business).
Under what conditions can I get a tax refund in the UK?
If you are a UK taxpayer, you may be entitled to claim a tax refund under the following conditions:
- Tax Overpayment: If you pay more taxes than you pay for your income, you may charge a rebate, usually through pay. This can occur in two situations:
- You have changed jobs and your new employer has not yet updated your tax laws.
- You were working part-time or there was a period during the tax year where you were not paid.
- Tax Code Error: If the tax law is incorrect, income tax can be overpaid. You can check whether the tax law is accurate or request an amendment to request a rebate if necessary.
- Changes in the situation: If your income situation changes during the tax year, you may be overexplaining if you start a new job, quit your old job, get promoted, or change your personal status.
- Billing fee: If work-related expenses such as uniforms, tools, travel expenses that are subject to tax easing and are not refunded, you can request a rebate.
- self-evaluation: If you are self-employed and you have overpayments when filing your self-assessed tax return, you are eligible to request an over-amount rebate.
- Transitions during tax year: If there are tax payments or allowances that were applied in one tax year but not the following year, you may have overpaid the tax.
- Pension contributions and charitable contributions: If you are a pension contributor and your payment is not considered when HMRC calculates your taxes, you are entitled to a refund.
- Venture capital investment: If you invest in government commercial programs such as the Enterprise Investment Scheme (EIS) and are not receiving the appropriate tax credit, you are eligible to request a rebate.
How to request a tax refund in the UK?
Follow these steps to request a tax refund in the UK.
- Check eligibility: Make sure you are eligible for a rebate from overpayment tax, incorrect tax laws, work-related expenses, or other eligible circumstances.
- Collect information: Collects related documents such as Form P60 and P45, paysiles, cost records, and tax law details.
- Determine claims based on employment. If you are currently a employed employee or someone who is about to claim for a previous tax year, you can file a Form P50 to earn a rebate. If you are still employed, you can go to the HMRC website or call the agent directly to make a claim. If you are self-employed, please submit your self-assessed tax return online or in a paper format. Calculate your taxes and adjust for overpayments before you charge a rebate.
- Claiming work-related expenses: If you are requesting a rebate for employment costs, you can apply to the HMRC website or submit form P87 to request a tax deduction for costs incurred by you, but the employer will not be refunded.
- Submit your claim: Fill out the required paper form or online application to see the details accurately. Make sure you have included all relevant information to support your claim, including your national insurance number.
- Waiting for HMRC response: HMRC will confirm your claim and notify you if your rebate has been approved or denied. This process can take several weeks to complete, so it’s important to remain a patient.
- I’ll receive your rebate: If the request is approved, you can expect to receive a rebate as a bank transfer or check.
- Keep a record: Maintains communication with the HMRC with copy of the bill for reference.
How much can you expect as a tax refund?
The amounts that can be received as a tax refund will depend on the following factors:
- Overpayment amount: HMRC determines the amount of tax you pay based on income, tax laws, and eligible deductions or allowances.
- Income tax rate: The tax refund amount depends on the annual income tax band, with a basic tax rate (20%) being billed for incomes ranging from 12,751 GBP to 50,270 GBP. Higher fees (40%) from 50,271 GBP to 150,000 GBP. Additional tax rate (45%) for incomes above 150,000 Gbp.
- Tax Year: Your tax situation can change every year and if your employment or business situation leads to overpayment in a particular tax year, you will only receive a rebate for that period.
- Overpayment period: If you overpay taxes over multiple tax periods, you may need a large rebate every year.
How do I calculate tax rebates?
To get a tax rebate estimate, you can use HMRC’s online tax calculator or consult a tax professional. If you suspect an overpayment tax, collecting paysiles and P60 forms can also be helpful to have a clear idea of how much you expect a refund.
When and how long does it take to receive a tax refund?
At the end of each tax year, you must receive a tax statement known as Form P800. The amount can be credited to your bank account within 5 business days of receiving the letter, or you can receive an HMRC check six weeks after the letter.
As soon as you receive your P800, we recommend that you log in to your personal tax account or HMRC app and request the amount that will be transferred to your bank account. If no requests have been made by the taxpayer, a check will be sent within 21 days.
In certain circumstances, HMRC will send a check without options for direct online payments. Please note that redemption of a rebate via checks can take much longer than transferring a bank.
If you are not in the UK or leave the country, how do I charge a tax rebate?
If you are planning to leave the UK and have already paid for the tax year, you can apply for a tax refund. The following are eligible taxpayer categories for refunds:
- People who lived and worked in the country
- Those who leave the country will not return
- People who have worked abroad for at least one year
If you are eligible, you can submit a P85 form either on the HMRC website or on the post office, and the agent can either pay the rebate amount in your bank account or via postal order after confirming the case. However, if you are filing a self-assessed tax return in the year you plan to leave the UK, you will not need a P85.
Final Thoughts
As a responsible taxpayer, you must maintain accurate financial records and remain up to date with any changes to UK tax laws or tax rates.
