PAYE Tax Refunds…

When talking about getting a PAYE tax refund it is often good to start with explaining what a tax refund is. This may sound obvious to some people, but many have never received a tax refund and assume that if they are due one it will automatically be issued.

There are various types of tax refund but in this article we are only dealing with a refund of tax if you are employed. It is important to remember that people who are employed can also be due a tax refund and tax relief is not just for the self employed.

People find themselves in a variety of different financial circumstances. Here are some of the more common reasons that result in a tax refund from HMRC:

  • Incurred job related expenses. This could include travel expenses, professional fees, equipment purchased and uniform laundering.
  • Leaving the UK. A tax payer who has left the UK in the last four years may have overpaid tax.
  • An incorrect tax code. Tax codes are used to ensure a worker pays the correct amount of tax. If the wrong tax code has been issued too much or too little tax may have been deducted from a wage.

Often tax refunds are issued automatically at the end of the tax year; this is usual if the reason for the refund is simple, for example if you have had a gap in employment. However in many cases an automatic refund does not happen. For example, although entirely eligible, you will have to actively seek a refund for overpayment of tax if it is related to expenses incurred due to your job.