Last year, 730,000 taxpayer refunds went unclaimed, with the average refund worth £855 – a total of £624m. Taxpayers have four years to claim their refund from the tax year in which PAYE – tax withheld at source on employment and pension income – was paid.
Taxpayers who are due a PAYE repayment will receive a P800 tax calculation letter, which will advise them of the refund due. Refunds are no longer processed automatically, so taxpayers must claim any repayment they are owed.
Repayments can be claimed through the HMRC app, via the bank transfer service within their personal tax account on the HMRC website, or by requesting a cheque. Online repayments are made in five working days, while repayment by cheque will take up to six weeks.
An overpayment of tax could be due to a payroll error or a change in individual circumstances. Repayments are usually owed because of an incorrect or outdated tax code or the taxpayer not having been allocated the full personal allowance for the year.
Other reasons could include the person not working for the full tax year or changing jobs or working hours during the year. Pensioners may be due a refund if the incorrect amount of state pension has been included in their tax code.
Adelle Greenwood, ICAEW Tax Manager, said:
“With more than 700,000 people missing out on a total of £624m in tax refunds last year, we’d encourage all taxpayers to check whether they are owed money from HMRC. To do this, taxpayers will need to check their P800 calculation is accurate and contains all relevant data. You will need your P800 reference number from your most recent tax calculation and your national insurance number to submit a claim.
“The P800 reconciliation occurs after the end of the tax year once the payroll is finalised. While employers cannot claim P800 refunds on behalf of employees, HMRC recently asked them to encourage their employees to check whether they are due a refund and to submit a claim if so.
“Employees who do not have other sources of income may not have realised that it is their personal responsibility to make the claim and are encouraged to do so now.”
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Chartered accountants are talented, ethical and committed professionals. ICAEW represents more than 210,000 members and students around the world. 98 of the top 100 global brands employ ICAEW Chartered Accountants.* 87% of FTSE 100 companies, and 81% of FTSE 250 companies in the UK, have an ICAEW member on their board.
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* includes parent companies. Source: ICAEW member data March 2025, Interbrand, Best Global Brands 2024.
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