UK taxpayers could be sitting on a significant amount of cash by conducting simple checks to see if they are due any money.
This could result in hundreds or even thousands of pounds being returned. A significant number of UK employees may have overpaid taxes and could be owed money by HMRC.
Given the complexity of tax codes and allowances, it’s easy to overlook refunds that you’re entitled to. Many taxpayers are unaware that they can not only claim a tax refund for the previous tax year but also backdate claims for up to four years, reports Birmingham Live.
The average four-year refund currently stands at just over £3,000. Janet Frodsham from Cupid PR provides guidance on how to check if HMRC owes you money and reclaim what is rightfully yours.
Review your tax code
Your tax code dictates how much tax is taken from your earnings. If your tax code is incorrect, you could be overpaying taxes.
Here’s how to ensure your tax code is correct:
Check your payslip: Your tax code should be listed on your payslip. Common tax codes include 1257L for the standard personal allowance.
Contact HMRC: If your tax code seems incorrect or you have multiple jobs, contact HM Revenue & Customs to rectify it. An error could result in overpaid taxes that you can claim back.
Claim tax relief on work expenses
If you’ve spent your own money on work-related expenses, you might be eligible to claim tax relief. Here are some examples:.
- Travel expenses: If your job requires you to use your own vehicle for work purposes (excluding commuting), you can claim Mileage Allowance Relief.
- Professional fees and subscriptions: Tax relief can be claimed on fees or subscriptions paid to approved professional organisations.
- Uniforms and work clothing: If your job requires you to wear a uniform that you have to wash, repair, or replace yourself, you are eligible to claim a tax rebate. This applies to a wide range of professions, from healthcare workers to retail employees.
You can make a claim for the current tax year and up to four previous tax years.
Claim Marriage Allowance
The Marriage Allowance allows you to transfer a portion of your personal allowance to your spouse or civil partner. If one partner earns less than the personal allowance threshold (£12,570), they can transfer up to £1,260 of their unused personal allowance to the higher-earning partner.
This could result in an annual tax saving of up to £252. Furthermore, with the option to backdate their claim for the past four tax years, eligible couples could also receive a lump-sum payment of over £1,000.
The online Marriage Allowance Calculator can be used to check eligibility within 30 seconds. The easiest way to claim the Marriage Allowance is through the GOV.UK website.
PPI and pension misselling compensation
Have you received compensation for mis-sold Payment Protection Insurance (PPI) or pensions? If so, you may have been taxed on this compensation, which you might be able to reclaim.
Those who had tax deducted from their PPI compensation can now reclaim it using an R40 form. The same applies for those who paid tax on compensation related to pension misselling.
Janet Frodsham, Head of Finance at Cupid PR conveyed: “By taking these steps, you can ensure that you’re not only receiving all the benefits and allowances you’re entitled to but also potentially reclaiming money owed to you by HMRC. It’s worth checking you might be due a refund worth hundreds or even thousands of pounds.”
