HMRC tax refunds: What are they and how do you claim a rebate?

There are a number of tax refunds and allowances available to UK taxpayers, depending on their employment status and personal circumstances.

And while you may be automatically given a tax rebate, you may also be eligible for some refunds you aren’t aware of.

What is a tax refund? 

Whether you’ve been overtaxed on your personal income or are eligible for certain tax benefits that can be refunded, you can get a tax refund (or a rebate) to get some of your money back.  

Although the tax system works efficiently the majority of the time, there will be occasions where errors occur and tax refunds become necessary.

So, it’s important to stay on top of your finances and understand your tax situation to ensure you’re not paying more than you should be.

If you think you have overpaid and haven’t yet received an automatic rebate, there is a process for claiming a refund.

How is your tax obligation calculated? 

The most common reason for a tax rebate is that you have paid too much income tax.

If you earn more than the £12,570 personal tax-free allowance, you will start paying income tax.  

But it’s not just income from employment that counts as personal income.

Everything from pension payments, income from life annuities and even interest on investments is considered ‘earned income’.

So even if you don’t earn a large basic salary, your other sources of income can make you eligible for higher rates of tax.  

With so many different sources of personal income eligible, HMRC relies on your employer to give you an accurate tax code and relies on you to fill in an accurate declaration form to work out how much tax you should be paying.

However, miscalculations do happen so it’s important to keep a close eye on your tax readings, especially if you’ve changed jobs during the tax year. 

What can you get a tax refund on?

You can get a refund on any taxable income you’ve paid taxes on, including: 

• Pay from your current or previous job
• Pension payments
• Income from a life or pension annuity
• A redundancy payment
• A Self-Assessment tax return
• Interest from savings or PPI
• Foreign income
• UK income if you live abroad
• Job expenses, like working from home costs or clothing and tools for your job 

Am I eligible for a tax rebate?  

You are eligible for a tax rebate if you’ve overpaid any tax or have yet to claim certain tax refunds, such as a uniform tax refund.

To get a rebate on any taxes you have overpaid, you can claim in arrears of up to four years and can also notify HMRC of your allowance in advance to update your tax code for future earnings. 

You may also be eligible for certain refunds depending on your employment status, but you may need to pursue these refunds yourself.

From certain travel and accommodation costs all the way through to professional membership refunds, you may be eligible if you have to foot the costs of these employment-related job expenses.  

You can check the government website for full information on eligibility. 

How to claim your tax rebate 

If you have received a P800 letting you know you are due a tax refund, you can easily claim this online using the Government Gateway.

The Government Gateway will take you through a few questions to check your eligibility before you can apply.

You’ll then be able to access your tax information and track your refund progress online. You’ll need to create a Government Gateway user ID here if you don’t already have one. 

If you’d prefer to speak to someone, there is a helpline available on the GOV.UK website, which includes postal support too.   

And if you are self-employed and complete an annual Self-Assessment, then you will need to complete your tax return before HMRC can process any rebate due.  

Even if you haven’t received a P800, you can still claim a tax refund by contacting HMRC directly through the online portal or by giving them a call.    

How much will I get back? 

Your tax refund is calculated based on several factors, such as income bracket, whether you work from home and if you’ve paid any expenses for equipment, vehicles or services as a result of your employment. 

Some allowances, such as clothing repairs or cleaning costs, depend on your income tax rate and how much you have spent.

For example, if you were to spend £50 per year on cleaning your work uniform, then you would be entitled to claim a tax rebate of 20% of this, or £10. 

When do you receive your tax refund? 

You should receive a tax calculation letter known as a P800 at the end of every tax year, which should inform you of any refunds you are eligible for. 

You could receive your refund within five working days, but you could also receive a cheque within six weeks of receiving your letter.  

If you are expecting a refund covering more than one year, you should receive one cheque.  

The process can take longer if you have made a query in relation to your self-assessment. 

The amount of time you should expect to hear back on your query can vary depending on your circumstances and enquiry. The government has a tracker to help you see how long queues are.   

How long does it take for my HMRC tax refund to go into my bank account? 

If you’ve received a P800 letter, it’s worth logging into your personal tax account or HMRC app and requesting that it be paid into your bank account. This usually takes five working days.  

It’s worth doing this as soon as you receive a P800 letter, as HMRC will send a cheque if you don’t do this within 21 days.  

A cheque takes a lot longer as it can take up to six weeks from the date on your P600 letter. In some cases, HMRC will send a cheque with no option for a direct online payment.

How to claim back tax when leaving the UK 

If you’re planning to leave the UK and pay tax in the year you’re leaving, you may be eligible for a tax refund.  

You can apply if you: 

• Lived and worked in the UK.
• Left the UK and may not return.
• Work overseas for at least one full tax year. 

You can fill out and submit a P85 form either online or by post. If you’re eligible for a refund, HMRC will pay it to your bank account or via postal order.  

You don’t need to complete P85 if you’re completing a self-assessment tax return in the year you plan to leave the UK.  

Need support with your taxes?

The tax system may be complicated, but with expertise at your side, you could claim back refunds that are sometimes worth hundreds of pounds. 

Unbiased can quickly connect you with a qualified accountant who can offer support with your tax obligations and help you find out whether you’re entitled to a refund.