HMRC is in the process of dispatching approximately four million tax refund notifications from June through August. Individuals who have overpaid Income Tax may anticipate receiving a P800 letter by mail.
Besides employees under the PAYE system, this situation may also affect pensioners who have made excess tax payments. Various factors contribute to overpaid taxes, with the primary issue often being an incorrect tax code assignment.
The prevalent tax code for the current fiscal year is 1257L, applicable to individuals with a single job or pension. This code signifies a tax-free allowance of £12,570 for the year.
If you have successfully reclaimed overpaid taxes, share your experience with us at mirror.money.saving@mirror.co.uk.
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Notably, different tax codes apply to certain individuals. For instance, individuals with a second job typically have a BR, D0, or D1 tax code, while those without a personal allowance may be assigned an 0T tax code.
To verify your tax code, refer to your latest payslip, P45 if recently departed from a job, or visit GOV.UK with your Government Gateway ID, a free 12-digit registration enabling access to UK government services online.
MoneySavingExpert.com cautions against scammers impersonating HMRC, emphasizing that HMRC communicates refund details solely through official letters, not via text, email, or phone calls.
If you are eligible for a refund, HMRC will send a text or prompt you to claim online through an official GOV.UK page. Ensure you have the reference number from your P800 letter and your National Insurance number ready. In cases of prolonged incorrect tax codes, you can claim refunds for up to four preceding years.
Under specific circumstances, HMRC may reimburse taxes beyond four years, such as in instances of HMRC errors resulting in overpayments. Conversely, if you have underpaid due to an erroneous tax code, the outstanding amount must be repaid.
It is advisable to address tax discrepancies promptly to prevent accruing additional liabilities. While seeking forgiveness for underpayments due to no fault of your own is possible, it is not guaranteed.
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