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If you’ve overpaid tax in the past, HMRC won’t tell you. It’s up to you to find out if you’re due a tax refund!
Tax refunds are more common than you think, but not everyone claims what they’re owed. Read on to make sure you don’t miss out.
Tax rebates are far more common than you might think. You just don’t hear about them because HMRC try not to shout about it!
Some of the most common reasons you might be due a tax refund are:
If you think any of these circumstances might apply to you then make sure you check if you’re eligible for a refund. And if you are, make sure you claim it!
This is the bit everyone is dying to know. Getting your refund may sound like a complicated process, but in reality it’s very straight forward.
You should be able to do it online, without wasting hours and hours trying to make sense of the whole system. Although, if your tax affairs are more complex it might take a bit longer.
It’s really important to get it right and you could end up with a large cheque at the end of it, so make sure not to rush the process and do it properly.
Remember: asking HMRC to investigate your tax code or tax liabilities could mean they discover you actually owe MORE tax. So, be prepared for this to happen, too!
The first place to check is the government’s online gateway. If you don’t have your online portal set up yet, it can take a bit of time. You’ll need to prove your identity online and wait for a unique code to be sent to you in the post to complete the application.
You can claim your rebate here.
This portal helps you find out if you can claim a tax rebate if you paid too much due to any of the following reasons:
If you think you’re owed a refund for any other reason, read on…
If in doubt, ask a professional.
Asking an accountant will be a particularly good idea if you’re self-employed, have a second job, or have income from something else (like a buy-to-let property). Paying tax as a self-employed individual is much more complex, so taking advice can be a really good idea.
An accountant will probably charge you a couple of hundred pounds for their basic service, including a self assessment tax return.
A good accountant will likely spot where you can save WAY more than that on your return, so it’s always worth investing in. There’s a high chance they’ll successfully get you a tax rebate too, so you could well end up with more money than if you didn’t hire them in the first place.
Just make sure you find a reputable accountant. Sadly, some unscrupulous businesses and individuals try to take advantage of those desperate for a tax rebate.
Check online reviews before committing to an accountant or ask your friends and family for recommendations. That way, you’re far more likely to end up with a good accountant who wants to help you.
If you’re self-employed you may be able to defer or cancel payments on account. This will apply to you if you’ve earnt less this year than you originally predicted, or less than you made last year.
Another reason you might be apply to defer payments is if your tax relief entitlements go up. This would mean that the amount you owe is less than you would have expected when you made your original payments on account.
You can apply to reduce or defer your payments on account here. If you’re struggling with the online form, you can fill it out manually and post it to HMRC.
You may be able to claim a tax rebate on payments on account from last year if you’ve earned less than anticipated this year. With many self-employed people seeing a decrease in earnings due to Covid-19 lockdowns, the likelihood you’ve overpaid your tax is significantly higher.
If your earnings have fallen below expectations, your previous payments may have been too high. This can be corrected before you pay the tax, by making a claim to HMRC to reduce your payments.
A lot of people don’t do this because their income is uncertain and it’s hard to plan ahead. Don’t worry if this is the case. If your final tax bill turns out to be less than the tax you have actually paid you can claim a tax rebate.
Everything will be done for you and will save you a huge amount of work and admin.
These companies may seem tempting, particularly if you’re feeling overwhelmed and are worried about claiming your refund. Don’t fall for their clever marketing and be very careful who you select. Some will deliberately make the process seem more complicated than it is to try and get your business. All they’ll actually do is take a huge cut of any refund you get.
They won’t do anything you can’t do yourself through the HMRC portal. Doing it yourself means you’ll end up with the full refund in your pocket and won’t have to share any of it with any third parties.
Alot of these companies will charge you almost as much as you’re owed from HMRC, so you’ll barely see a penny of YOUR refund.
Remember – if something seems too good to be true, it probably is. You can almost certainly achieve a better outcome on your own.
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