What Does HMRC Tax Back Mean?
If you have paid more tax than you owe, you can claim the difference back from HMRC. This is commonly called an HMRC tax back, a tax rebate, or a tax refund. The principle is straightforward: HMRC should only collect the correct amount of tax based on your income, allowances, and reliefs. When too much is taken, you are entitled to a refund. [1][2]
The most common reasons for overpaying include:
- Being on the wrong tax code through your employer or pension provider.
- Having emergency tax applied when you start a new job.
- Claiming employment expenses that reduce your taxable pay.
- Overpaying tax on a self assessment return.
- Receiving redundancy pay that triggers an incorrect tax calculation.
- Having UK income while living abroad.
- Overpaying tax on savings interest or PPI payouts.
Each scenario has a different process. We will walk through the main ones below.
How to Claim HMRC Tax Back Through PAYE
If you are an employee or receive a pension, your tax is usually deducted through PAYE. If HMRC calculates that you have overpaid, they will often issue a refund automatically. But this is not guaranteed. You may need to take action yourself. [1][2]
The first step is to check your tax code. Your tax code is shown on your payslip or your P60 (the year-end summary from your employer). If the code is wrong, your tax deduction will be wrong. Common codes like 1257L (standard personal allowance) or BR (basic rate on all income) can be incorrect if your circumstances have changed.
You can check your tax code and estimated income for the current year through your personal tax account on GOV.UK. If you spot an error, you can report it online. HMRC will then adjust your code and issue a refund for any overpaid tax from the current or previous tax year.
For previous tax years, you can use the HMRC tool to check what you need to do. The tool covers overpayments from pay, job expenses, pensions, self assessment, redundancy, UK income if you live abroad, savings interest, PPI, annuities, foreign income, and UK income earned before leaving the UK. [1][2]
Important: you cannot claim a refund directly through this tool. It tells you what to do next. [1][2]
Claiming Employment Expenses
If you have paid for work-related expenses that your employer did not reimburse, you may be able to claim tax relief. Common examples include:
- Working from home costs (if your employer does not cover them).
- Fuel costs for business travel.
- Work clothing, tools, or specialist equipment.
- Professional subscriptions and fees.
For employed dentists, HMRC restricts tax relief to 90% of a subscription. Dentists who are not employed can claim on 100% of the fee. All submissions must be made by 5 April each year. The tax relief is then reimbursed via your tax code for the following year. [3]
You can claim for up to four previous tax years. Use form P87 if your total claim is under £2,500. For larger amounts, you will need to complete a self assessment tax return.
Claiming HMRC Tax Back Through Self Assessment
If you submit a self assessment tax return, you may discover that you have overpaid tax. This can happen if you overestimated your income, missed a relief, or paid too much on account.
When you file your return, HMRC calculates the tax due. If you have already paid more than that amount through PAYE or payments on account, the system will show a refund due. You can request this refund when you submit the return online. HMRC will usually process it within a few weeks.
If you realise you overpaid in a previous year, you can amend your return. For most people, you have up to 12 months from the filing deadline to make a correction. After that, you may need to write to HMRC.
As ICAEW qualified accountants, we see many business owners miss out on refunds simply because they do not check their tax position regularly. A quick review of your tax account each year can save you money. [4]
What About Redundancy Pay?
Redundancy payments can trigger incorrect tax deductions. The first £30,000 of a statutory redundancy payment is tax-free. But if your employer applies tax to the full amount, you will overpay. You can claim the overpaid tax back from HMRC using the online tool or by writing to them. [1][2]
Similarly, if you receive a termination payment that includes pay in lieu of notice, the tax treatment can be complex. It is worth checking your P45 and the tax deducted.
Claiming Tax Back on Savings and PPI
If you have savings interest that was taxed at source (basic rate), and you are a non-taxpayer, you can claim the tax back. The same applies to PPI payouts that had tax deducted. Use the HMRC tool to check what you need to do. [1][2]
For pension annuities, tax is deducted at source. If your total income is below the personal allowance, you can reclaim the overpaid tax.
Claiming Tax Back if You Live Abroad
If you have UK income while living abroad, you may have overpaid tax. This includes rental income, pension income, or investment income. You can use the HMRC tool to check what you need to do. [1][2]
You may also be able to claim relief under a double taxation agreement. This prevents you from paying tax twice on the same income. The process varies by country, so it is worth getting professional advice.
How Long Does an HMRC Tax Back Refund Take?
If you claim online through your personal tax account, refunds are usually processed within 5 to 10 working days. If you submit a paper claim, it can take up to 8 weeks. For self assessment refunds, the timeline is similar once the return is processed.
If you have already claimed a tax refund, you can check when to expect a reply on the HMRC website. [1][2]
Common Mistakes to Avoid
Do not use a third-party claims company without checking their fees first. Many charge a percentage of your refund, sometimes up to 30%. You can do the same work yourself for free using the HMRC online tools.
Do not ignore a tax code notice. If HMRC sends you a coding notice (P2), read it carefully. It shows the allowances and deductions HMRC is using. If it is wrong, tell them immediately.
Do not assume HMRC will automatically correct an overpayment. While they do catch many errors, they also miss some. It is your responsibility to check your tax position. [4]
When to Get Professional Help
Most HMRC tax back claims are straightforward. But some situations are more complex:
- If you have multiple income sources and complex reliefs.
- If you are claiming for several previous tax years.
- If you have been overpaid tax due to an error by your employer.
- If you are a contractor caught by IR35 and need to adjust your tax position.
- If you are claiming R&D tax credits alongside a refund.
In these cases, speaking to an accountant can save you time and ensure you claim everything you are entitled to. Our services team can review your tax position and handle the claim on your behalf.
If you are unsure about your tax code or whether you have overpaid, start by checking your personal tax account online. From there, you can decide whether to claim yourself or get professional support. Our contact page has details for a free initial chat.
For more guidance on tax basics, see our fundamentals page. It covers tax codes, allowances, and common reliefs in plain English.
Sources
- gov.uk: Check how to claim a tax refund - GOV.UK
- aka.hmrc.gov.uk: Check how to claim a tax refund - GOV.UK
- bda.org: Reclaim my tax - British Dental Association
- icaew.com: Thousands of taxpayers could be missing out on tax refunds | ICAEW