Attention residents living in the United Kingdom! Understanding the UK’s tax refund policy can actually save you on daily expenses!
It allows eligible individuals to legally apply for a partial refund of the taxes paid, providing more financial flexibility.
This article will briefly introduce who can claim a tax refund, which taxes are eligible for refunds, and how to apply for one.
Why claim a tax refund?
Usually, refunds come into play when residents unintentionally overpay taxes or when tourists are leaving the country.
For those working in the UK, overpaying taxes can happen due to various reasons, especially during job changes or incorrect tax codes.
For self-employed individuals, inaccuracies in online submissions may result in overpayment.
Short-term visitors or tourists can reclaim a portion of the Value Added Tax (VAT) incurred during shopping, encouraging spending.
Who can legally benefit from a tax refund?
Firstly, UK residents and those holding valid work visas are eligible.
As long as you legally reside in the UK and pay income tax, you qualify for the benefits of the tax refund policy.
Secondly, temporary visitors planning to leave the country within a certain period may also qualify for partial refunds.
In fact, most employees have their taxes deducted at source and don’t need to calculate their tax payments separately.
However, self-employed individuals need to calculate and pay taxes separately.
Checking for overpaid taxes
If you work in the UK and have paid excessive taxes, you will typically receive a P800 letter from HMRC and get a refund.
If you haven’t received any letter but believe you have overpaid, you need to check for potential reasons such as incorrect tax codes, job changes, multiple income sources, or errors due to changes in personal circumstances.
You can use the online tools on the HMRC official website to check for the correct tax code.
How to apply for a tax refund
If you are an employee, you can apply for a refund online through HMRC, and keep track of the progress in your account queries.
Once the online application is completed, the refund will be sent via cheque and received within about three weeks.
For self-employed individuals, you need to complete the tax return form before HMRC processes the refund.
After that, contact HMRC to apply for a refund, and the process may vary depending on individual circumstances.
You can also directly contact our accounting team for assistance, and we will handle your application promptly.
