Thousands of taxpayers could be entitled to money back from HMRC because of incorrect tax codes, expenses and missed allowances
Around 12,500 pension savers have received tax refunds after too much money was deducted from their retirement withdrawals.
HM Revenue and Customs (HMRC) returned more than £50million to people who withdrew money from their pension pots between April and June, with the average repayment standing at around £4,000.
Pension savers are not the only taxpayers who may have paid more tax than they were required to, with incorrect tax codes, workplace expenses and missed allowances among the circumstances that can result in overpayments.
There are several ways taxpayers can check whether they are entitled to money back from HMRC, with some claims able to be made online.
One of the most common reasons for overpaying tax is being given an incorrect tax code.
PAYE employees are assigned a tax code by HMRC, which is shown on their payslip and determines how much income tax is deducted from their earnings.
If the wrong code is applied, an employee can have too much tax deducted from their wages until the error is corrected.
Workers can check their tax code through their payslip, the HMRC app or their online personal tax account.
Changing jobs can also result in an incorrect tax code being applied, particularly if a P45 is not received or transferred correctly when an employee moves between employers.
A gap between jobs can also result in the wrong personal allowance being applied, potentially leading to an employee paying more tax than necessary.
Workers who have paid for items required to carry out their jobs may also be eligible for tax relief on certain employment expenses.
Eligible costs can include specialist clothing and uniforms, professional subscriptions, tools and mileage incurred as part of work duties.
However, employees cannot claim tax relief on costs that have already been reimbursed by their employer. Where an employer has paid only part of an eligible expense, relief can generally be claimed on the amount that remains unpaid.
Taxpayers making claims should keep receipts and other evidence of their expenditure in case HMRC requires proof of the costs. The cost of cleaning and maintaining a work uniform can also qualify for tax relief in certain circumstances.
Employees may likewise be able to claim relief for replacing or repairing small tools needed for their job, such as scissors used by a hairdresser.
Eligible employment expense claims can be backdated by up to five years, meaning taxpayers who have not previously claimed could potentially recover money from earlier tax years.
Married couples and civil partners could also be entitled to Marriage Allowance if they meet the relevant conditions.
The allowance allows a person earning below £12,570 to transfer £1,260 of their personal allowance to a spouse or civil partner who pays tax at the basic rate.
The recipient must generally have taxable income within the basic-rate band, which currently covers income between £12,571 and £50,270 in England, Wales and Northern Ireland.
Marriage Allowance can reduce a couple's tax bill by up to £252 for a tax year. Eligible couples can also backdate a claim for up to four years, meaning claims can currently reach back to the 2021/22 tax year.
Applications can be made online, with confirmation usually provided shortly after the claim has been submitted.
Anyone who believes they have been given an incorrect tax code can contact HMRC to have their details checked and, where necessary, corrected.
Taxpayers can also use their online HMRC account to check their income, allowances and tax code.
If an overpayment has occurred during the current tax year, the refund may be made through the employee's wages once HMRC has corrected the tax code.
HMRC also sends P800 tax calculations to some taxpayers after the end of the tax year where its records indicate that too much or too little tax has been paid.
P800 letters are generally issued between June and March and explain whether a taxpayer is due a refund or has additional tax to pay.
Where a refund is available, the letter will explain whether it can be claimed online.
Taxpayers who are entitled to a repayment can submit their claim through HMRC's online service, with refunds generally paid within five working days after a successful online claim.
