Tax Rebates & Refunds

Helping you to understand tax refunds in the UK

October 29, 2010
Posted in Tax Rebates — Written by Geoffrey

If you have been living in the United Kingdom and have paid your taxes regularly, you may be entitled to a refund. Calculating the amount of tax you have paid in a financial year can be tricky and confusing. It is important for you to have the details of your total earnings and taxes paid during the financial year to calculate the tax refund.

International students are able to get the entire amount paid in the case when they leave the country for good. Individuals earning below the tax-free threshold are also entitled to a tax refund.

Tax code 647L: This tax code requires you to have the details of the amount you have earned in a financial year. Tax code 647L is one of the most commonly used codes. It denotes £6,475, which is your tax-free allowance for the fiscal year. There are other tax codes that determine the personal tax-free allowance in a financial year.

Identifying rates, percentages and yearly salaries: It is important to identify the tax group that you fall under in order to be able to calculate the amount of tax paid by you. It should be noted that the taxes paid by an individual depend on the salary earned in a fiscal year.

The HMRC usually differentiates individuals according to tax codes. If you have been earning below £37,500, you are liable to pay 20 percent of your income as tax. Individuals earning between £37,500 and £150,000 are charged 40 percent of their income while people who earn above £150,000 per year attract a 50 percent tax rate.

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