How To Apply For A Tax Refund In The UK – A Complete Guide

What is a tax return? How does it work in the UK?

The process of paying taxes is fairly straightforward for most of the people. Taxes are taken out of your pay packet before you get your salary, and you don’t think much about it.

The process may be more complicated for others. They may have multiple income streams, be self-employed, or have made a profit on an asset they sold, known as capital gains.

In these cases, HMRC doesn’t know how much tax you owe, so you need to figure it out and tell them. Your tax return tells them how much tax you owe. Additionally, you can use the form to claim any relief or tax allowance owed to you.

HMRC then receives the form by either paper or online submission by a certain date. Typically, if you miss the 31 January deadline, you will be fined and charged interest.

Now, you can apply for a tax refund in simple and easy steps and process your tax refund application from your phone!

Self-Assessment tax repayments: how do they work?

HM Revenue & Customs (HMRC) would deal with your tax refund once they have processed your tax return if you overpaid tax on your income.

In your tax return, you can specify how you would like the repayment to be pay to you. You can have it:

• paid directly into your bank account; or
• paid to you by cheque.

It is important to note that HMRC might not follow your instructions and may make repayments to the last credit or debit card you used to make a payment on the self assessment account. Taxpayers are warn that this will happen, for example, on the tax return form and the notes, but many will still be caught off guard. 

Self Assessment of tax liability

Whenever another Self Assessment tax liability becomes due within the next few weeks, for example, the first payment on account for the next tax year, any amount available for repayment will be reduce by the amount need to cover the new liability (or liabilities).

Additionally, if you owe HMRC another amount, such as a tax credit overpayment, you can ask them to manually ‘offset’ the repayment against that amount. Therefore, the amount you are due to be repay will be deduct from the amount you owe. Any remaining repayment will be repay, or you will have to pay the rest if you still owe some. 

If you have not completed your tax return by the end of the tax year, you still have time to complete it before the submission deadline. You will receive your refund (or offset) sooner if you submit your tax return as soon as possible. In Ifu submit your tax return online rather than by paper, it might be process faster, and you may receive your refund sooner.

Self Assessment returns by HMRC:

HMRC processes self Assessment returns, and most repayments will be issue automatically when there is a request for repayment. In certain circumstances, HMRC may need to be prompt to issue refunds. For example, where you do not state how you would like the refund on your return, the amount involved is small, or any factors prevent mechanical issues (this can happen for several reasons, and HMRC has to look into them).

You can request repayment by logging into your HMRC online account and clicking the ‘Request a repayment’ button.

If I leave the UK, how do I claim back overpaid tax?

Some income tax you have paid may be refundable if you leave the UK to live or work abroad.

You must send HMRC form P85 ‘Leaving the UK – getting your tax right’ when leaving the UK. The form can be find on GOV.UK. Now, you can Apply For A Tax Refund in simple and easy steps and process your tax refund application from your phone!

In addition to your P45, you must send the form P85 to HMRC. You should keep a copy of both the P85 and P45 parts 2 and 3 and send the letter by registered mail. If you are eligible for a tax refund, HMRC will send it to you by postal mail or bank transfer.

How to claim a tax refund?

To determine how much income tax you will owe, use this tax calculator on the HMRC website.

You will receive a P800 tax calculation from HMRC if you have overpaid. You will be able to get a refund with this letter.

Keep your records!

There is a lot of paperwork involve, but this only shows how important it is to maintain good records. This makes tax return time simpler and leaves less room for error. Now, you can Apply For A Tax Refund in simple and easy steps and process your tax refund application from your phone!