This information applies to England, Wales, Scotland and Northern Ireland

• What is a tax refund
• Refunds under PAYE
• Time limits on claiming a tax refund
• Interest on refunds

What is a tax refund

A tax refund is a refund of tax which has been overpaid. There are a number of reasons why tax may have been overpaid, including:

• you start a new job and are taxed under an emergency code for a while
• you marry or form a civil partnership and you or your spouse or civil partner is born before 6 April 1935
• you become entitled to an increased tax-free personal allowance, which is due for the whole of the year in which you become 65
• HM Revenue and Customs (HMRC) sends the wrong tax code to your employer or your employer does not use the correct code
• you are self-employed and you make payments on account for the following year, under the self assessment scheme. These payments are too high because of a change in your circumstances, for example, there has been a downturn in your business. You have not made a claim to reduce your payments on account and your final tax liability turns out to be less than the tax you have actually paid
• you’re a pensioner with more than one occupational pension and your tax-free personal allowances have not been allocated properly so you’ve paid too much tax
• you have more than one job. The employer at your second job will automatically deduct tax at basic rate so you may not get the benefit of all your tax-free personal allowances. This will frequently apply if you are a student or low-paid worker.

For more information about emergency PAYE codes, see The Pay As You Earn (PAYE) system. For more information about wrong tax codes, see Pay As You Earn (PAYE): common problems.

Back to top

Refunds under PAYE or self assessment

If you overpay tax under PAYE or self assessment, you can make a claim for a refund.

For more information about claiming a tax refund for overpayments made through your job, or if you become unemployed, see the HMRC website at: www.hmrc.gov.uk . For more information about claiming a refund after leaving your job, go to the HMRC website at: www.hmrc.gov.uk.

If you are on strike, a refund will only be paid to you either when you leave the job or when you go back to work. You will not get a refund at the end of the financial year.

For more information about wrong tax codes, see Pay As You Earn -.(PAYE): common problems. For more information about how benefits are taxed, see Tax-free and taxable income.

Back to top

Refunds following a death

An overpayment of income tax may arise following a death. For more information about claiming back income tax on behalf of someone who has died, go to the HMRC website at: www.hmrc.gov.uk. If a refund of tax is made, it is counted as part of the estate of the person who has died.

Refunds of tax on savings interest

You may pay too much tax on savings interest. If so, you can make a claim for a refund. You can get more information about getting interest tax-free and claiming a refund on tax overpaid on interest at the HMRC website. Go to: www.hmrc.gov.uk.

Refunds of tax overpaid on pensions or on cashing in small pensions

You may pay too much tax on your pension or when you cash in a small pension. You can get more information about claiming a refund on tax overpaid on a pension at the HMRC website. Go to: www.hmrc.gov.uk

Time limits on claiming a tax refund

If you pay all your tax under PAYE, you can claim a refund within five years of 31 January following the end of the tax year in which tax was overpaid. The tax year runs from 6 April one year to 5 April the next year.

This time limit is due to change from 1 April 2012.

If you complete a self assessment tax return, you must claim any  refund you think is due within four years of the end of the tax year in which the tax was overpaid.

If you think you might be entitled to a refund, claim now so that you don’t lose the right to claim.

You can find examples of the deadlines for claiming a refund on the HM Revenue and Customs website at www.hmrc.gov.uk for self assessment taxpayers, and at www.hmrc.gov.uk  for PAYE tax payers.

Back to top

Interest on refunds

HMRC must pay interest on a tax refund if the repayment is made after 31 January following the end of the tax year in which you overpaid the tax.

For more information about the rates of interest go to the HMRC website at: www.hmrc.gov.uk.

Back to top

Citizens Advice