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How to Reclaim Tax

You may expect a tax refund if you have overpaid the tax.

Use the following service by HMRC to claim tax refund:

  • Pay from your current or previous job:

Sometimes, you might overpay tax when receiving PAYE. But don’t panic. HMRC will reconcile your tax refund at the end of the tax year. HMRC may issue P800 or a cheque in GBP on your address. You also have an option of receiving the tax refund in your bank.

  • A redundancy payment:

If you have been redundant from your job you can claim some of your tax back while you were working. This is known as ‘tax rebate’ or ‘tax refund’.

Claiming tax refund after redundancy/dismissal at job:

Step 1:

Are you due for tax refund?

If your answer is a yes to these questions then you might be due a tax rebate:

  • Were you redundant in the middle of the tax year? The tax year starts from 6th April and ends on 5th April
  • Were you employed and was paid through PAYE (pay as you earn)?
  • You are still jobless?

How much tax you will be refunded will depend on:

  • Your earnings at which tax year started
  • Tax you paid on those earnings or any other income

Step 2:

The tax owed by you:

HMRC website provides a tax checker tool. You can find out on this tol the money you can claim. The website of HMRC explains everything. But you need to keep payslips and bank statements for calculation.


Reclaim your tax:

The tax refund depends on the following:

  • The time you have been unemployed for at least four weeks:

You can claim tax rebate by filling the form P50 and send it to HMRC. You will get the refund within tax year.

  • If you have claimed tax benefits since losing your job

If you have claimed tax benefits since losing your job , your refund will be paid by the Benefit Office. These benefits include job seeker’s allowance and Carer’s allowance.

  • If you have found another job within four weeks of losing the old one

Here, your new employer will pay any tax refund owned by you.

Tax on your redundancy money:

Your redundancy is  tax free upto £30,000. But if your redundancy pay includes holiday pay or pay in lieu of notice then you have to pay tax on it. It’s not necessary that your employer has always got the calculations correct.  The tax deductions may be over or under and it’s your duty to notify HMRC.

  • Self-assessment tax return:

You claim tax refund the same as PAYE.

  • Income from pension annuity

When receiving income on pension and wages through PAYE, you may sometimes overpay tax. Your P800 will show if you have a tax refund. You may get a refund online or through cheque within 45 days.

  • UK income if you live abroad:

To get the tax refund you will have to send P85 form to HMRC so that you are eligible for tax rebate. You can either claim online. You must send form P45 and P85 together to HMRC. If you are entitled for tax rebate, HMRC will send it by post or bank account. 

  • Interest from savings or PPI

Tax is automatically taken off at 20% on interest from savings. To claim overpaid tax on savings income you will need to fill R40 form or form 43 (for overseas)

Note: The time limit for claiming a tax refund is four years. If you think you are eligible for a tax refund, then don’t wait and claim immediately or seek help from your accountant. It is completely free of cost to claim tax back with HMRC.

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