The UK tax authority, HMRC, has revealed that an estimated 730,000 tax refunds remain unclaimed, leaving households across the country missing out on an average of £855 each. This warning comes as experts urge taxpayers to check whether they are owed money from overpaid income tax.
Anyone due a PAYE repayment should receive a P800 tax calculation letter detailing the amount they are owed. However, many people may not be aware that they need to take action to claim these refunds. Adelle Greenwood, tax manager at the Institute of Chartered Accountants in England and Wales, 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.” She added: “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.”
Money Saving Expert, the site founded by Martin Lewis, also highlighted the issue: “Every year, millions of people are overtaxed – and some are due £1,000s back. So, do a quick check with our Tax Code Calculator to see if your code's right.”
Last year, HMRC paid around £3 billion to 4.2 million people who had overpaid income tax. These figures relate to those who pay tax via the Pay-As-You-Earn (PAYE) system and do not include self-employed individuals who complete a self-assessment tax return. In the previous year, 4.1 million people were identified through PAYE as having overpaid income tax, amounting to £2.7 billion. The total repaid that year was higher, at £3.6 billion paid to 6 million people, as refunds can include earlier tax years.
If you suspect your tax code is incorrect, you can contact HMRC directly on 0300 200 3300 to speak to a representative and resolve any issues. Checking your tax code could result in a significant refund, so it is well worth taking a few minutes to verify.
