So you got a bit eager and overpaid your tax. Well, worry no more as you can reclaim your tax and here is how.
First, you need to find out if you paid too much tax then how much and then we need to get your money back to you as soon as possible.
Have I paid too much tax?😮🔥
Well, the key thing here is your tax code. Your employer and pension provide use this to determine how much tax you should be paying. If your tax code is incorrect you could be underpaying or overpaying your tax.
So ensure your tax code is correct by cross checking with HMRC, your employer and pension provider.
Is claiming tax back free?👀
Yes, you can claim your tax back from HMRC for free. Don't get fooled into using a company to reclaim your tax as it is very easy to do. The only exclusion to this will be if you have an incredibly tax situation. In that instance you will be better off seeking financial advice from an independent qualified tax advisor.
How is tax calculated?☎
To understand if you are overpaying on your tax and might have reason to claim some tax back you must first understand how tax is calculated.
Everyone earning over a minimum limit is required to pay tax but we each have a personal allowance based on income.
What is a personal tax allowance?💪🏻
Your personal tax allowance is the amount of money you can earn before paying income tax.
The personal tax allowance for the 2018/2019 tax year is £11,850 and this i subject to change.
After earning over £100,000 per year you will begin to see a reduction in your personal allowance and at £122,000 per year you will have no personal tax allowance.
How do you claim overpaid UK tax?🔔
Overpayments can occur for a varying amount of reasons including
Your monthly wage differs from month to month due to things such as bonuses or availability of jobs
You are not employed for every month out of the year
If you are employed you will pay income tax through the PAYE system which deducts your income tax before the rest of your income is paid to you.
PAYE uses a tax code to work out how much tax you should pay but to be sure you haven’t overpaid especially if any of the two scenarios apply you should contact HMRC or use a tax calculator to see if you are due a tax rebate.
If you are self employed and want to rectify or claim money back from HMRC for tax filed within the last 12 months you can do this by simply completing an amendment online or writing to HMRC.
If you are self employed and want to claim a rebate or rectify information on tax filed more than 12 months ago you will need to write to HMRC including the following information:
The tax year you are claiming for
Why you have paid too much tax
Evidence of tax you have paid( e.g a copy of the tax return)
Where you want any rebate due to you to be sent
A copy of your signature