Are tax rebates automatic?

The quick answer is it depends on the type of tax rebate you are claiming.

You need to be proactive about checking your tax situation. Apart from the fact that it is your responsibility to make sure you are paying enough tax, you could well be missing out on hundreds, sometimes thousands, of pounds worth of your own money.

The onus is on you to check and act accordingly.

The tax office places the responsibility of reclaiming overpaid income tax with each tax payer so if you miss out it’s usually classed as being your own fault. The end result is lots of unclaimed tax and many people paying too much tax now and into the future.

Automatic tax rebates

Some tax rebates under PAYE are sent out automatically by HMRC without you needing to do anything. The common reasons for an automatic rebate to be issued include:

• HMRC performs an automatic reconciliation of your tax record after the most recent tax year ends and finds that you have overpaid tax. The reconciliation checks income from PAYE sources like employment income shown on your end of year P60 certificate.
• You have changed employers during a tax year and HMRC repays you any overpaid tax through your next salary payment from your employer.

Tax rebates you must claim

A tax rebate that is not refunded automatically will need you to interact with HMRC to ensure you are repaid the income tax you are owed.

For employees under PAYE claiming employment expenses is a common reason for needing to claim a tax rebate. There is a whole host of tax allowance regulations to encompass the wide variety of taxpayers’ occupations.

These specific tax reliefs are only applicable if you make an official claim and include:

• Business mileage in your own vehicle.
• Accommodation and subsistence when working away from home.
• Uniform laundering.
• Working from home.
• Tools, toolboxes and equipment.
• Training.
• Professional subscriptions to organisations, Trade Unions and journals.
• Occupation specific flat rate expenses.

… and that’s just a few of the more common ones.

To make your claim if you don’t complete a self assessment tax return you must complete a P87 form which can be found online via the HMRC website.

Who can get a tax rebate?

Any tax payer can be eligible to a tax rebate however why you have overpaid tax is dependent on the make up of your own tax affairs.

Some other instances where you may have overpaid income tax are:

• You have not used up all of your Personal Allowance when you stop working.
• You have overpaid on pension income or a pension lump sum payment.
• An incorrect tax code has been used and too high a level of tax has been taken from your pay packet.
• You have a lower income, or you earn in a different country to where you live and you pay too much tax on savings interest.

How do I claim my tax rebate?

You can claim online using your personal tax account or receive your repayment via a cheque. This can only be done after HMRC have processed your tax rebate claim and produced a P800 calculation.

On the surface some claims seem quite straightforward: figure out which tax allowances apply to your employment situation, gather your evidence and fill in the forms. But as soon as you delve into the rules of tax allowances, it all starts getting rather complicated. You can ask HMRC for help by calling them or in writing.

Backdate your tax rebate for four tax years

In some cases you could be due a rebate for more than just one year with HMRC being able to refund overpaid tax for up to four tax years. Did you also know that you can backdate your first tax relief claim for 4 tax years?

Your P800 tax rebate calculation

Is a form showing you what tax you have overpaid and is based on all the information HMRC has about your income, work benefits and tax. It is absolutely crucial that you do not take HMRC’s P800 calculation as always being correct, but do the maths yourself to double check.

They may have made a mistake or have incomplete or incorrect information about your circumstances. They are looking after millions of taxpayers; you can’t expect them to get everything right.

Tax Rebate Services

We believe that everyone is entitled to information about the tax system so that they can pay their fair share of tax and reclaim any overpayment. We provide free tax relief guides for different professions and you can use our free tax calculators to help you work out how much you could be owed by HMRC.