Tax Rebates & Refunds

A simple guide to tax refunds

February 25, 2011
Posted in Tax Rebates — Written by Geoffrey

If you have made paid excess tax by mistake, then you will be due a tax refund. This is a procedure carried out by the HMRC and takes care of job and pension related excess tax payments. These repayments are usually in the form of a cheque which is sent to you by post or a direct transfer to your account with your next incoming salary. The HMRC will deal with tax overpayments for the previous six years.

How has the overpayment occurred?

You may have been one of the people whose salary may have been taxed under the wrong tax code. Because of this you may have paid too much tax as a result. Other reasons for paying too much tax include:

• When you get a new job, you may have to have a temporary tax code for the time being.
• If you worked for only a part of the year and paid taxes for the whole year, then you will get some tax back.
• In some cases an individual does two jobs at once, and hence the calculated tax may be incorrect.
• If your workplace offers you a settlement and you haven’t informed the HMRC, then you may pay excess tax.
• Another reason could be that you simply made a mistake on your tax return or that HMRC made a tax calculation error.

The tax office applies tax codes which enable your company or pension provider to calculate the exact amount of tax you have to pay. This tax is then taken off your salary before your salary enters your bank account. If you have previously paid too much tax the HMRC will send you a new tax code so you don’t overpay again.

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