If you have paid more tax than you owe, you are entitled to claim it back. HMRC does not always spot the overpayment itself. In many cases, you need to take the first step.
This article explains how to claim an HMRC refund tax, what situations qualify, and what to watch out for. We cover employed people, self-employed individuals, and company directors.
What Is a Tax Refund?
A tax refund (also called a tax rebate) is money HMRC returns to you because you paid too much tax during the tax year. You may have overpaid through your PAYE code, your Self Assessment return, or because your circumstances changed mid-year [1].
Common reasons for overpaying include:
- Starting or stopping a job partway through the year
- Working only part of the year (e.g. students, seasonal workers)
- Having the wrong tax code applied
- Claiming allowable expenses you did not claim at the time
- Receiving a redundancy payment that was over-taxed
- Having untaxed interest or dividends where tax was deducted at source
If any of these apply to you, you may be due money back.
How to Check If You Are Owed an HMRC Refund Tax
HMRC provides an online tool on gov.uk that lets you check what you need to do if you paid too much tax [1]. The tool covers overpayments from:
- Pay from a job
- Job expenses (working from home, fuel, work clothing, tools)
- A pension
- A Self Assessment tax return
- A redundancy payment
- UK income if you live abroad
- Interest from savings or PPI
- Income from a life or pension annuity
- Foreign income
- UK income earned before leaving the UK
You cannot claim a refund directly through this tool. It tells you what to do next [1].
If you have already claimed a refund, you can use the same service to check when you can expect a reply [1].
Claiming a Refund Through Your Tax Code
If you are employed and your tax code is wrong, HMRC may adjust it automatically. But that does not always happen. If you think your code is wrong, check it on your HMRC online account or through the HMRC app.
Common tax code errors include:
- Missing the personal allowance (code 0T instead of 1257L)
- Having an emergency code (1257L W1 or M1) when you should have a cumulative code
- Being on a BR code (basic rate) when you should have a personal allowance
If your code is wrong, contact HMRC or ask your accountant to check it. A corrected code can refund overpaid tax through your future pay packets rather than as a lump sum.
Claiming a Refund Through Self Assessment
If you are self-employed or a company director, you typically claim a refund through your Self Assessment tax return. You file the return by 31 January after the tax year ends. If you overpaid, HMRC will refund the difference.
You can claim refunds for:
- Allowable business expenses you missed in earlier years (within 4 years of the end of the tax year)
- Overpaid Class 2 or Class 4 National Insurance
- Overpaid tax on savings interest or dividends
- Overpaid tax on redundancy payments
If you are not required to file a Self Assessment return but have overpaid tax, you can write to HMRC or use the online form [1].
Claiming a Refund for Job Expenses
If you are employed and paid for work-related expenses yourself, you may be able to claim tax relief. This includes:
- Working from home costs (if your employer did not reimburse you)
- Fuel costs for business travel
- Work clothing (uniforms, protective gear)
- Tools and equipment
- Professional subscriptions and fees
You claim this through your HMRC online account or by completing form P87. If the total expenses are under £2,500, you can claim without filing a full Self Assessment return.
HMRC will then adjust your tax code or send you a refund.
Claiming a Refund for Redundancy Payments
The first £30,000 of a redundancy payment is tax-free. If your employer taxed the full amount, you can claim the overpaid tax back from HMRC [1].
You do this by writing to HMRC or using the online tool. You will need your P45 and details of the redundancy payment.
Claiming a Refund for Savings and Investment Income
If you are a basic rate taxpayer, you have a Personal Savings Allowance of £1,000 (£500 for higher rate taxpayers). If your bank or building society deducted tax from your savings interest, you can claim it back if you are within your allowance.
Similarly, if you received dividends and are within the dividend allowance (£500 for 2025/26), you can claim back any tax deducted.
You claim this through your Self Assessment return or by contacting HMRC.
Claiming a Refund for Pensions
If you are drawing a pension and your tax code is wrong, you may be overpaying tax. This is common if you have multiple pensions or if you started drawing a pension partway through the year.
You can claim a refund through your HMRC online account or by writing to HMRC. The online tool covers pension overpayments [1].
Claiming a Refund for UK Income If You Live Abroad
If you live abroad but have UK income (rental income, pension, savings interest), you may be entitled to a refund if you have paid too much UK tax. The rules depend on your residency status and any double taxation agreements [1].
You claim through your Self Assessment return or by contacting HMRC.
Claiming a Refund for Foreign Income
If you have foreign income and paid tax in the country where it arose, you may be able to claim Foreign Tax Credit Relief in the UK. This stops you being taxed twice on the same income [1].
You claim this through your Self Assessment return.
Claiming a Refund for Income Earned Before Leaving the UK
If you leave the UK partway through the tax year, you may have overpaid tax because your personal allowance is calculated on a full year basis. You can claim a refund for the unused part of your personal allowance [1].
You claim through your Self Assessment return or by contacting HMRC.
How Long Does a Refund Take?
HMRC aims to process refunds within 4 to 6 weeks. If you claimed through your tax code, the adjustment may take up to 8 weeks. If you claimed through Self Assessment, the refund is usually issued within 4 weeks of filing your return.
If you have already claimed a refund, you can check the status online [1].
What to Watch Out For
Tax refund scams are common. HMRC will never contact you by text, email, or phone asking you to pay a fee to release a refund. If you receive such a message, report it to HMRC.
Also be aware of tax avoidance schemes. Promoters may claim they can get you a larger refund than you are entitled to. HMRC warns that these schemes rarely work and can leave you with a larger bill plus penalties [2].
If you are unsure about a claim, speak to a qualified accountant. As ICAEW qualified accountants, we can review your tax position and ensure you claim only what you are entitled to.
When to Use an Accountant
If your tax affairs are straightforward, you can claim a refund yourself using the HMRC online tool. But if you have multiple income sources, complex expenses, or are unsure about your tax code, an accountant can save you time and money.
We can check your tax code, review your Self Assessment returns for missed claims, and ensure you do not overpay in future. Contact us to discuss your situation.
For more guidance on tax basics, visit our fundamentals page. If you are considering changing your business structure, see our incorporation guide. And for a full list of our services, visit our services page.