Tax Rebates & Refunds

Know more about the procedure for claiming a tax refund

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

If you pay tax on personal, company or a state pension via PAYE, there are numerous reasons why you may end up paying an excess amount of tax. In case you have overpaid on tax, you are entitled to claim this tax back.

A few reasons for tax overpayment

If you receive a pension every month, you may end up paying excessive tax due to the following reasons:

Wrong tax code – If your pension provider does not have appropriate information about you or has put you on an incorrect tax code, you might end up paying too much in taxes.

Reduced income – Many times, the income and taxable state benefits of individuals get reduced. If the HMRC is not aware about this, the amount of tax will be calculated based on their previous income. Due to this, you may have to pay more tax. You may also have to pay over the required threshold if your pension amount is incorrect.

You have different tax codes – Individuals who have numerous tax codes due to different income sources or pension schemes may also end up paying an excessive amount of tax. Even if you have received more than one pension lump sum, you may still end up making a tax overpayment.

If you think you have paid too much tax, you can use a tax rebate calculator to find out if you are due a tax refund from HMRC. If you are doubtful about the procedure, hiring a professional would be a wise decision.

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