Audience: Employed workers, ex-employees
Claiming a tax refund from HMRC might sound daunting, but for most employed people it is a relatively straightforward process. Each year, HMRC estimates that over £500 million in tax refunds goes unclaimed by UK taxpayers — money that is rightfully theirs. Whether you overpaid tax because of an incorrect tax code, a period of unemployment, or a job change, this guide explains exactly how to reclaim what you are owed.
There is no need to use a paid tax refund company to claim back tax from HMRC. You can do it yourself for free, and HMRC will pay refunds directly into your bank account.
There are many reasons why an employed person might overpay income tax. Starting a new job on an emergency tax code is one of the most common. If your employer did not have your P45 when you joined, they may have taxed you as if you had no personal allowance for the first few weeks or months, resulting in an overpayment.
Leaving a job partway through the tax year is another frequent cause. If you stopped working before the end of April 5th — for any reason, including redundancy, retirement, or choosing to take time out — you may have paid more tax in the months you worked than was actually due when your income is calculated for the full year.
Receiving an incorrect tax code throughout the year can also result in overpayment. If your personal allowance was reduced by HMRC due to an old benefit or inaccurate income estimate, you may have paid more tax than necessary. Equally, pension contributions, Gift Aid donations, and certain work expenses can all reduce your taxable income and potentially result in a refund.
After the end of each tax year, HMRC reviews PAYE records and sends a P800 tax calculation to employees who appear to have paid too much or too little tax. If you have overpaid, your P800 will show the amount of the refund and will usually offer you the option to claim it online through the gov.uk website — where payment is typically made within five working days.
If you do not claim online within 45 days of receiving your P800, HMRC will send a cheque to your registered address. It is worth claiming online if you can, as it is both faster and more reliable.
Not everyone who overpays tax receives a P800 automatically. If you believe you are owed a refund but have not received a P800, you should contact HMRC directly.
If you overpaid tax and would like a refund before the end of the tax year, there are options available. If you are still employed and your tax code is wrong, HMRC can issue a corrected code to your employer, who will then deduct less tax from your remaining pay — effectively returning your overpayment gradually.
If you have left a job and are not working, you can use form P50Z (if you are not claiming benefits and do not expect to work again that year), form P53Z (if you have taken money from a pension), or form P55 (for a partial pension withdrawal). These forms allow you to claim a refund on tax withheld on a one-off or lump sum payment.
Alternatively, you can contact HMRC by phone or through your Personal Tax Account and request a review of your year-to-date tax position.
You can claim a tax refund going back four tax years. For example, in the 2024/25 tax year, you can still claim refunds for 2020/21, 2021/22, 2022/23, and 2023/24. Claims older than four years are generally not accepted.
To claim for a previous year, you will need your P60 or P45 for that year, as these documents show your total earnings and tax paid. You can submit the claim through your Personal Tax Account online, or by writing to HMRC with the relevant details.
If you were employed and are claiming a refund for overpaid tax on your wages, HMRC will usually make the calculation and send you a cheque or bank transfer. You do not need to complete a full self-assessment tax return unless your tax affairs are more complex.
Many employees are also entitled to tax relief on certain work-related expenses that they pay out of their own pocket and that their employer does not reimburse. Common examples include professional subscriptions and union fees, the cost of tools and equipment required for your job, expenses for washing a work uniform, and in some cases mileage expenses for business travel in your own car.
If your employer does not reimburse these costs, you can claim tax relief on them through HMRC. The relief is worth 20% (or 40% if you are a higher rate taxpayer) of the qualifying expense. For example, if you spend £200 per year on a professional subscription, you can claim £40 back as a basic rate taxpayer.
Claims for employment expenses are usually made using form P87, which can be submitted online through your Personal Tax Account, or by post if you prefer.
It is strongly advisable to claim tax refunds directly from HMRC rather than using a commercial tax refund company. These companies — which advertise aggressively online and on social media — typically charge a commission of 25% to 48% of your refund, significantly reducing the amount you receive.
Some companies also use assignment of income agreements, which effectively mean that HMRC sends the refund cheque directly to the company rather than to you, and you receive only what remains after their fee. Claiming directly through gov.uk is free, straightforward, and means you keep every penny of your refund.
**Disclaimer: ***This article is for general information purposes only and does not constitute tax advice. Tax rules can change and individual circumstances vary. Always consult a qualified tax adviser or contact HMRC directly for advice specific to your situation.*