Tax Rebates & Refunds

Do you qualify for tax rebates?

June 27, 2011
Posted in Tax Rebates — Written by Geoffrey

Many of the people who are employed under the Pay As You Earn (PAYE) system are eligible for tax rebates and the rebate may arise out of a variety of reasons.

PAYE is a simple yet clever system that allows employers to deduct income tax and national insurance from the employees’ wages or salary, as the case may be. This works well for most tax payers.

However, the fact that such a simple system is used to collect taxes from millions gives rise to problems in its flexibility. One of the most common reasons for the overpayment of taxes arises from the fact that employees get charged for the full year’s income tax even though they may not have worked for the full year. Suppose you have left the UK halfway through a tax year, on PAYE you will be given half of your free pay allowance which is actually your right. Thus, you are entitled to a rebate. Similarly, if you have joined halfway through the tax year, and you are taxed on a monthly coding, also known as an emergency code, you will receive half of your monthly tax free allowance. This again qualifies you for a refund.

This system would be fool-proof if you were working full-time in the UK. But if that is not the case, a tax refund may be due to you. Many times, people who come back to the UK are taxed on a one month basis even though they would have claimed Job Seeker’s Allowance and handed over the same to their new-employers. Also, people who come to the UK, and then leave may have a tax refund due only if their employment or their terms of employments have exceeded two years.

It is advisable to use the help of an agent to claim your tax rebates.

No Comments (Leave comment »)

No comments yet.

Comment RSS | TrackBack URL

Leave a comment