HMRC is in the process of dispatching approximately four million tax refund notifications from June to August. Individuals who have overpaid Income Tax may expect to receive a P800 letter in the mail.
Aside from employees under the PAYE system, this situation also affects pensioners who might have overpaid taxes. Various factors can lead to overpayment, with the primary issue often stemming from an incorrect tax code assignment.
For the current tax year, the most prevalent code is 1257L, applicable to individuals with a single job or pension. This code signifies a tax-free allowance of £12,570 for the tax year.
If you have reclaimed overpaid taxes, share your experience with us at mirror.money.saving@mirror.co.uk.
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Different tax codes apply to various circumstances. For instance, individuals with multiple jobs may have a BR, D0, or D1 tax code, while those without a personal allowance might have an 0T code.
To locate your tax code, refer to your most recent payslip, P45 if you recently left a job, or visit GOV.UK with a Government Gateway ID. This free 12-digit number grants access to UK government online services.
MoneySavingExpert.com cautions against HMRC impersonation scams, emphasizing that HMRC communicates owed tax amounts solely through letters, not texts, emails, or calls.
If eligible for a refund, HMRC will either notify you via text or prompt you to claim online through an official GOV.UK page. The process requires your P800 letter reference number and National Insurance number, with potential claims dating back up to four years if your tax code was incorrect.
Under specific circumstances, HMRC may reimburse taxes beyond four years, especially if the overpayment was their error. Conversely, if you underpaid due to a faulty tax code, you will need to repay the deficit.
Addressing tax issues promptly is advisable to prevent larger future liabilities. While seeking write-offs for underpayments is an option, it is not guaranteed.
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