Between June and August, HMRC is sending out approximately four million tax refund letters. If you have overpaid Income Tax, you may receive a P800 letter in the mail.
This process does not only affect employees paid through PAYE but also impacts pensioners who may have paid excessive tax. Various factors can lead to overpaying taxes, with the most common one being an incorrect tax code assignment.
For individuals with a single job or pension, the prevalent tax code for the current year is 1257L. This code indicates a tax-free allowance of £12,570 for the tax year.
To reclaim overpaid tax, share your experiences with us at mirror.money.saving@mirror.co.uk. Stay informed about HMRC updates by joining The Mirror’s Money WhatsApp community for the latest news and money-saving tips directly on your phone.
Different tax codes exist based on individual circumstances. For instance, individuals with a second job may have a BR, D0, or D1 tax code, while those with no personal allowance may have an 0T tax code.
To find your tax code, refer to your recent payslip, P45 (if applicable), or visit the GOV.UK website with your Government Gateway ID. It’s crucial to be cautious of scammers posing as HMRC, as HMRC primarily communicates about owed taxes through official letters and not via text, email, or phone calls.
If you are due a tax refund, HMRC will either text you or prompt you to claim it online through the official GOV.UK page. Ensure you have the reference number from your P800 letter and your National Insurance number for the refund process. In cases of incorrect tax code leading to underpayment, you may be required to repay the outstanding amount.
Address any tax discrepancies promptly to avoid accruing additional charges. While you can attempt to have underpaid taxes forgiven if it was not your fault, it is not guaranteed. HMRC may refund taxes for up to four previous tax years, with exceptions possible under specific circumstances.
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