How to claim a tax rebate after losing your job

It is common to be eligible for a tax rebate if you were made redundant or were dismissed. If you were employed and paying tax through PAYE and lost your job part way through the tax year it is highly likely that you will be owed a refund on tax already paid.

How much tax rebate you can claim depends on how much you earned so far in the tax year and how much tax you have already paid.

Depending upon your circumstances there are different ways to claim your tax back;

If you have been claiming taxable benefits, for example job seekers allowance or carer’s allowance, since losing your job, any tax refund you are owed will be paid by the benefit office. To make a claim in these situations you should send the benefits office parts 2 and 3 of your P45, keeping part 1A for your records. They will use these to work out your refund and will pay it either after the end of the tax year or after you stop claiming taxable benefits, whichever comes first.

If you start a new job within four weeks of losing your old one, any tax rebate you are owed will be paid by your new employer. Again they will need parts 2 and 3 of your P45 to work out how much refund you are due. You will then be reimbursed any overpayment of tax at the same time as receiving your pay.

If you have been employed for four weeks or more since losing your job, and you are not claiming any taxable benefits, you can claim your tax rebate by filling in a P50 form. This form will need to be sent to HMRC along with parts 2 and 3 of your P45. Any refund you are due will then be sent out to you in the post by the end of the tax year.

Any redundancy pay you receive, up to £30,000 is tax free. Any holiday pay or pay in lieu of notice you receive alongside redundancy pay however, is taxable. Employers can get calculations wrong meaning you pay too much or too little tax. If you think this is the case it is up to you to contact HMRC.