How to Get a Tax Rebate – All You Need to Know

If you think you have paid too much tax this year, you are not alone. 

Like yourself, millions of UK taxpayers overpay every year, and often without realising it. This can happen due to a number of reasons for example if you are changing jobs or taking a break from work, in which case you might be charged with the wrong amount of income tax. 

Whether it’s an emergency tax code, unclaimed work expenses, or switching jobs mid-year, HMRC might owe you money.

The good news is, claiming taxes from HMRC is easier than you think. In this guide, we will help you understand these important areas surrounding tax rebate:

• What exactly is tax rebate?
• Who is eligible to claim tax rebate?
• What are the common reasons people overpay taxes?
• How to get back your cash as fast as possible?
  

What Is a Tax Rebate?

A tax rebate is the money HMRC owes you when you have paid more tax than you actually owe. The UK tax system isn’t perfect, and overpayments are more common than you might think.

At the end of each tax year, which closes on 5^th April, HMRC does a final check to see if your tax payments were of the right amount, or if you have overpaid or underpaid.

Rebate vs. Refund: What’s the Difference?

Think of tax rebates as HMRC giving you back your money after they have accidentally taken too much. It’s essentially their way of saying, “Oops, we took too much — here’s your cash back”. This typically happens in case of PAYE overpayments. 

A rebate is more like an automatic correction on behalf of HMRC.

A refund on the other hand, is the money you actively claim back from HMRC. Unlike rebates, a tax refund usually involves you taking action to claim back your work expenses, declaring extra income, or to file a Self-Assessment return. 

Think of refunds like a reimbursement for costs you have paid out of your pocket. 

Who Is Eligible for a Tax Rebate?

Tax rebates aren’t just for accountants, millions of ordinary UK taxpayers like yourself can qualify every year. The good news is, that you might be owed hundreds (even thousands) if any of these sound familiar:

• PAYE Employees – If your tax code was wrong (especially if you see “BR” or “0T” on your payslip), you have probably paid more than you owe.
• Job Hoppers – If you have changed your jobs or left work mid-year, it is possible that HMRC hasn’t adjusted properly to your change of circumstances.
• Emergency Tax Victims – Emergency tax means you’ve likely paid too much on your first paycheck at a new job.
• Expense Claimers – Uniforms, tools, mileage or professional fees you paid for work could be refundable.
• Self-Employed Workers – Even if you do self-assessment, you might have missed claimable expenses
• Multiple Incomes – If you have multiple income streams, it is possible you could be on the wrong tax code.
• Pensioners – Many retirees assume they stop paying tax – but that’s not always true. You could be owed money
• Part-Year Workers – If you are a student, or have taken a gap year, you might have overpaid your tax amount,

The brutal reality? There’s £4.9 BILLION in unclaimed tax rebates sitting with HMRC right now.  

Your share could be in there too if you fall in the right category.

How to Check If You’re Due a Tax Rebate

If you’re wondering whether HMRC owes you money, you might be surprised how easy it is to find out.

Use HMRC’s Online Services

Start by logging into your HMRC personal Tax Account. This portal will show you your Real-Time Tax Position, and will also highlight any discrepancies.

Alternatively, you can also use HMRC’s free tax checker tool for a quick assessment of your taxes.

Review Your Documents

Your paperwork holds important clues as to how much tax you owe. Hence it is very important to carefully review your P60 (which summarises your annual tax payments) and P45 (if you changed jobs), and pay special attention to any months where tax deduction seems unlikely high.

You should also always keep an eye out for emergency tax codes like “BR” or “0T” on old payslip, as codes like these often indicate overpayments.

Spot the Red Flags

It is important that you keep a lookout for warning signs such as unexpected high tax deductions, multiple jobs being taxed simultaneously, work expenses you never claimed, or continuing student loan repayments after you’ve cleared your debt.

How to Claim a Tax Rebate

If you are employed or receive a pension, it is possible that you have paid too much tax through PAYE.

Sometimes HMRC automatically sends you a tax calculation letter (P800), which tells you how to claim your rebate. This means that HMRC has already identified an overpayment and you are already halfway to getting your money back.

If this doesn’t happen, there is no need to worry, because claiming what you owe is very easy if you follow these few important steps.

1. Gather Your Documents

First you have to collect your P60 or P45 forms, all your payslips and such receipts for work-related expenses (like uniforms, tools, or mileage logs). If you have these, it will make the process smoother.

2. Choose Your Claim Method

• Online (fastest option): Log into your HMRC Personal Tax Account and follow the rebate claim prompts.
• By post: Complete your form P50 (if you’re not working), P53 (if you’re still employed), or P87 (for expenses under £2,500).

3. Submit Your Claim

It is very important that you fill in all the required details accurately. Any wrong details can hinder your claim and nullify it.

4. Wait for Processing

HMRC typically processes claims within 6-8 weeks for online submissions and 10-12 weeks for postal claims. You will receive updates via your online account or by post.

5. Receive Your Payment

Once your claims are approved, you’ll receive your refund either through bank transfer (if HMRC has your details) or by cheque. The money should appear in your account within 5 working days of approval. If any discrepancies are to arise in their calculations, HMRC will contact you by post with their revised figures before issuing payment.

Special Considerations for the Self-Employed

If you are self-employed or have other income, you would be required to fill in a self-assessment tax return to let HMRC know how much tax you have previously paid. Any overpayment identified will typically be refunded automatically after filing your return.

However, if you believe you’ve overpaid but haven’t received a refund, you’ll need to contact the Self Assessment helpline rather than using the standard PAYE refund service.

How Long Does It Take to Receive a Tax Rebate?

Once you have submitted your claim, HMRC will typically process the rebate within 6 to 8 weeks for all the online claims, and 10 to 12 weeks for all the postal applications. If you have provided your bank details to HMRC, the refund will be paid into your account via bank transfer. 

This usually arrives within 3 to 5 working days after the approval. If HMRC doesn’t have your bank details, you’ll receive a cheque by post, which can add extra time to getting your rebate.

Can tax rebates be delayed?

Delays can happen if HMRC needs additional information from you or if there’s a backlog on their end. If your rebate hasn’t arrived after 12 weeks, you can follow up by:

• Checking your HMRC online account for updates
• Calling the tax refund helpline (0300 200 3300)
• Sending a secure message via your Personal Tax Account

For urgent cases, such as financial hardship, you can explain your situation to HMRC—they may prioritise your claim.

Can You Use a Tax Agent?

Tax agents are very helpful in simplifying your tax rebates but they also come with some trade-offs.

If you are thinking of hiring a tax agent, they can guide you in handling your complex paperwork and can also maximise your claim amounts. This will help you save valuable time if you are unfamiliar with all the ever-changing tax rules.

The main downside to hiring a tax agent is that they often charge you 25-50% of your refund depending on your agent. Some agents may also make exaggerated claims about what you are owed. In such cases, you will be held legally responsible for any errors.

When hiring a tax agent, it is always recommended to check your agent’s credentials and fee structure before proceeding. You should ask them questions like “Are they HMRC-authorised” and “what documents will I need to provide?”.

Can you use an accountant?

Accountants are better suited for complex cases like multiple income streams, capital gains calculations and years of unexplained expenses.

For most PAYE employees, HMRC offers free online services on their website. The government’s step-by-step online guidance makes it surprisingly straightforward to check and claim any overpayments yourself.

How to Avoid Overpaying Tax in Future

Staying in control of your taxes in advance is always a smart move that can save you time, stress, and unexpected costs down the line. 

You can follow these simple habits to stay ahead: 

• First, always check your tax code whenever you start a new job or receive a pay rise, as incorrect codes can lead to overpayment.  
• Keep digital copies of all your work expense receipts using your phone’s notes app, making it easy to claim allowable costs like uniforms or mileage.
• Most importantly, it is important to set up and regularly check your HMRC personal Tax Account, where you can instantly update your tax position and update employment details. 
• Doing these quick checks just twice a year could save you from the hassle of reclaiming overpaid tax later.

Don’t Let Your Money Sit With HMRC!

As we have seen, millions of taxpayers accidentally overpay each year – from emergency codes to unclaimed expenses. You should always check your payslips for any red flags like “BR” codes while also tracking your work expenses digitally. 

It is also recommended that you review your HMRC account annually.

Your tax refund could be just minutes away! While your taxes are fresh in your mind, login to your Personal Tax Account, and check if you have overpaid or not. 

For more complex situations, we always recommend that you consult your accountant. Our tax specialists at Heighten Accountants can quickly check if you’re owed money. For your peace of mind, do not delay discussing your situation with an experienced accountant.