Thousands of people living in the UK could be owed a tax refund from HMRC worth thousands of pounds.
If you've never applied for a tax refund, you can backdate a tax claim for four years. Tax experts suggest the average payout is around £2,500.
The money paid back from overpaid tax in previous tax years is often applied as a cash sum. As for the current tax year, your tax code is normally adjusted so you pay less tax.
The UK tax year starts on April 6 each year and ends on April 5 the following year.
Of course, the amount you could actually get back from the taxman does depend on how much tax you’re due.
But any cash that is returned is likely to be welcomed by families during the cost of living crisis.
It comes as inflation hit a new 40-year high of 9% last month, while workers have also been hammered by a hike in National Insurance.
National Insurance contributions have just increased by 1.25 percentage points, from 12% to 13%.
Check if you're on the right tax code
You might be eligible for a refund if you’ve been paying too much tax.
One of the most common ways this happens is if you’re accidentally placed on the wrong tax code - for example, if you’ve just moved jobs.
Your tax code is made up of numbers and letters and is used by HMRC to determine how much tax you should be paying each month.
Have you managed to claim back £1,000s in tax? Let us know: levi.winchester@reachplc.com
If you have just one employer and earn under £100,000, your code is likely to be 1257L.
The quickest way to check your tax code is to look at your payslip, P45 or P60 form.
If you've lost track of these, the Gov.uk website also has a dedicated webpage when you can see your tax code.
Once you know what tax code you’re on, you can then compare this against a free tax code calculator online.
MoneySavingExpert has just updated its calculator so you can get a rough idea as to whether yours is correct.
No tax calculator will be able to tell you for definite if you are on the right code - but this should give you a good indication.
If you suspect you've been overpaying, you can contact HMRC on 0300 200 3300. You can also speak to an advisor online via their live chat service.
HMRC will then contact your employer to correct your tax code, and you'll get back any owed tax in your next payslip.
If you have been overpaying tax for some time, you can claim back up to four additional years - so as far back as the 2018/19 tax year.
The bad news is, if you have been underpaying, you will need to pay your tax back. It’s best to sort this sooner rather than later.
Other ways to claim back tax
If you’ve worked from home during the pandemic, you may also be able to claim back tax on the extra costs associated from not being in the office.
You can claim tax relief on £6 per week if you were forced to work from home during the 2019/2020 or 2021/2022 tax years.
The amount you get back based on the rate at which you pay tax.
For example, if you pay the 20% basic rate of tax you would get £1.20 per week in tax relief - this adds up to around £60 per year.
If you pay higher rate tax, your relief will be worth 40% or £2.40 per week - so around £125 for the year.
You may also be owed money back from the taxman if you haven’t applied for marriage tax allowance.
Marriage tax allowance allows eligible couples to transfer £1,260 of their personal allowance to their spouse or civil partner to cut their yearly tax bill.
Your personal allowance is the amount you can earn tax-free each tax year - the standard rate is currently £12,570 before you start paying tax.
Marriage tax allowance for the 2022/23 tax year is worth up to £252 - but if you're able to make a claim for all four previous tax years, you could get £1,242 back.
The amounts you can claim back for previous tax years are slightly less than the current tax year.
Finally, you may also be owed tax if you’ve had a PPI payout.
Most banks and lenders automatically deducted tax from PPI payouts, even though not everyone has to pay it.
When the payouts were made, banks refunded the PPI premium plus 8% in statutory interest.
The statutory interest part is taxed as savings, and most firms deducted this automatically.
But since April 2016, more people have been due some of this tax back thanks to the introduction of the personal savings allowance.
This allows basic rate taxpayers to earn £1,000 a year tax-free interest on their savings, or £500 for higher-rate payers.
