Millions of people in the UK are entitled to a tax refund from HMRC but never claim it. This can happen for a number of reasons — a change in job, an incorrect tax code, overpaid tax on savings interest, or work expenses that qualify for tax relief. Claiming what you are owed is straightforward in most cases and can be done online.
This article explains the most common reasons people are owed a tax refund, how to check whether you are due money back, and how to make a claim.
Why might you be owed a tax refund?
Wrong tax code
Your tax code tells your employer how much tax to deduct from your pay. If your tax code is wrong — for example, if it does not reflect your personal allowance correctly, or if it includes allowances you are no longer entitled to — you may pay too much or too little tax. HMRC sends a PAYE coding notice when your tax code changes, and you can also check your tax code through your personal tax account at gov.uk.
Common reasons for an incorrect tax code include starting a new job, having multiple jobs, receiving company benefits, or HMRC using out-of-date information.
Leaving a job or starting work partway through the year
If you left a job during the tax year or did not work for the full year, you may have paid more tax than you owe. This is because your employer deducts tax assuming you will earn the same amount all year — if your income drops, you may have overpaid.
Work expenses
Employees who pay for certain work-related expenses out of their own pocket — and are not reimbursed by their employer — may be able to claim tax relief. Qualifying expenses can include uniforms and specialist clothing, tools and equipment, professional subscriptions, and in some cases working from home costs. You can claim for up to four years of past expenses.
Overpaid tax on savings interest
If you paid tax on savings interest but your total income was below the personal allowance, or if your savings interest fell within your Personal Savings Allowance, you may be entitled to a refund of tax that was deducted at source.
Marriage Allowance
If you are married or in a civil partnership and one partner earns below the personal allowance while the other is a basic rate taxpayer, you may be eligible for Marriage Allowance — a transfer of up to £1,260 of personal allowance which reduces the higher earner's tax bill. You can backdate a claim for up to four years.
Pension lump sums
If you took money from a pension and had too much tax deducted — which is common when a pension provider uses an emergency tax code — you may be entitled to a refund. HMRC has specific forms for claiming overpaid tax on pension withdrawals.
How to check if you are owed a tax refund
The quickest way to check is through your personal tax account at gov.uk/personal-tax-account. You will need a Government Gateway login. Your account shows your tax code, recent tax calculations, and any repayments owed to you.
If you are employed and pay tax through PAYE, HMRC automatically reconciles your tax at the end of each tax year and will notify you if you have overpaid. This is done through a P800 tax calculation letter, which HMRC issues between June and November each year. If you receive a P800 saying you are owed a refund, you can claim it online or HMRC will send a cheque if you do not claim within 45 days.
How to claim a tax refund
If you are employed (PAYE)
For most employed workers, the process is straightforward. Log in to your personal tax account at gov.uk, check your tax calculation, and follow the prompts to claim any refund shown. Alternatively, you can call HMRC on 0300 200 3300.
For work expenses, you can claim using form P87 online through your personal tax account, or by post.
If you are self-employed
If you complete a self-assessment tax return, any overpayment will be shown on your return and can be refunded to your bank account or offset against future tax bills.
Time limits
You can claim a tax refund for up to four tax years before the current one. After four years, the right to claim is lost. The current tax year runs from 6 April to 5 April.
Watch out for tax refund companies
There are many companies that offer to claim tax refunds on your behalf, typically taking a percentage of the refund as a fee — sometimes 30% to 50% or more. In most cases, claiming directly through HMRC is free and straightforward, and there is no need to use a third party. Be especially cautious of companies that ask you to sign an assignment of income, which can mean HMRC pays the refund directly to the company rather than to you.