HMRC is to send out around four million tax refund letters over the summer
HM Revenue and Customs (HMRC) is set to send out around approximately four million tax refund letters between June and August. If you’ve overpaid Income Tax, you might be due a P800 letter in the post, and this could affect pensioners who have paid too much tax, as well as employees paid by PAYE.
There are many reasons why people end up overpaying tax – the most prevalent reason being that you could be on the incorrect tax code. The most common code for the current tax year is 1257L for those with one job or pension. This indicates that you can earn £12,570 in one tax year before being taxed, as this is the current personal allowance.
However, this tax code doesn’t apply to everyone. For instance, if you have a second job, it will likely have a BR, D0 or D1 tax code, or if you have no personal allowance, you may have an 0T tax code.
You can locate your tax code on your latest payslip, on your P45 if you have recently left your job, or on GOV.UK if you have a Government Gateway ID. This is a 12-digit number that is free to sign up for, and it allows you to access UK government services online.
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MoneySavingExpert.com has cautioned people to be vigilant of fraudsters attempting to impersonate HMRC. They advised that HMRC will always send a letter about any tax you’re owed – it won’t text, email or call you. If you’re entitled to a refund, HMRC will either send you a text or ask you to claim it online. According to MoneySavingExpert.com, the correct link is always an official GOV.UK page.
You’ll need the reference number from your P800 letter and your National Insurance number. If your tax code has been incorrect for some time, you can claim back up to four additional years.
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Under certain circumstances, such as if it was their error that led to you overpaying tax, HMRC may reimburse further than four tax years. However, if you’ve underpaid tax due to an incorrect tax code, you’ll be required to pay this back.
Don’t let this deter you – it’s better to resolve this sooner rather than later to avoid a larger bill. If it wasn’t your fault that you underpaid, you could attempt to have the tax written off, but this isn’t guaranteed.
