Tax Rebates & Refunds

How can you qualify for a PAYE tax rebate?

July 3, 2010
Posted in Tax Rebates — Written by Geoffrey

PAYE (pay as you earn) tax is taken at source by the HMRC. To work out the tax you have to pay the HMRC need to know your annual salary. A P60 document is generally issued at the end of the tax year and details this information. On the other hand, a P45 is issued when you leave employment before the end of tax year.

If you have a P45 or a P60 it can show you the actual income that you have earned as well as the amount of tax deducted from your income. The PAYE tax system is however only accurate for clear-cut situations. However, if you quit your job half way through the tax year, you may not get the complete value of personal allowances that you can claim before you have to pay tax.

On the other hand, if you start your employment mid-way through the tax year then you may have a month on an emergency tax code. This happens quite often when employers do not check whether their employees have a P45 or not.

Claim tax back

If you have been taxed on an emergency code and you have only worked for half a year, you may become eligible for a tax refund. You may also quality for a tax rebate if a benefit has been applied to your PAYE code which you no longer obtain, like a car or a medical allowance. If you think you have paid too much tax, you can claim this tax back from the government.

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