HMRC is advising taxpayers to verify if they are eligible for a tax refund, with an average refund amount of £473. One common reason for potential overpayment of tax is being placed on an incorrect tax code, particularly after a job change.
For the current tax year, the most prevalent tax code is 1257L, applicable to individuals with a single job or pension. This code allows for a tax-free earnings threshold of £12,570 annually, aligning with the current personal allowance.
Various factors can lead to overpaid taxes, such as incorrect splitting of personal allowances for individuals with multiple jobs or pension income. HMRC estimates sending approximately four million P800 tax refund letters between June and August.
To claim a tax refund, individuals can access their tax code on their recent payslip, P45 if they recently left a job, or through GOV.UK with a Government Gateway ID. The HMRC app provides further guidance on claiming refunds.
Individuals due a refund can initiate the claim process online through GOV.UK, using the reference number on their P800 letter and National Insurance number. In cases of prolonged incorrect tax codes, refunds for up to four preceding years can be claimed.
HMRC may consider refunding taxes beyond four years in specific situations, especially if the overpayment resulted from their error. It is important to be cautious of potential scammers impersonating HMRC, as the official entity communicates refund information primarily through letters and not via calls, emails, or texts.