Tax Rebates & Refunds

Claim tax back – how overpayment can happen

April 16, 2011
Posted in Tax Rebates — Written by Chris

Do you pay tax through PAYE? If yes, there are different reasons why you might accidentally pay excess. PAYE or pay as you earn is a system used by pension providers and employers to deduct tax from your pension or wages. So, if you have overpaid your taxes, you can claim it back.

How tax overpayment can happen through your pension

If your pension provider does not have your proper personal information, there is a chance that you may be put on the wrong tax code. Tax overpayment can also happen if HMRC is unaware of your state benefits or any other income that has reduced. This means the income included on your tax code might be too high.

If you have employment and a pension or two or more pensions, then you are likely to have more than one tax code. In this case, if you have not utilised all your allowances on the first tax code, it is assumed that you have used it for other tax codes.

Tax overpayment can also happen if you paid tax on your retirement annuity prior to 2007. If you have received a pension lump sum, there are chances that a wrong amount of tax could have been deducted. If the above situation holds true, you become eligible to claim tax back. To ensure that the tax refund process goes smoothly and quickly, always opt for professional help.

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