HMRC has sent a reminder to nearly one million individuals who are entitled to a tax refund.
In a post on Instagram, HMRC detailed how they had contacted individuals last year who had overpaid income tax.
There are various reasons why one might have overpaid income tax, with the most common being an incorrect tax code assignment.
If you have overpaid tax, HMRC typically sends a P800 tax calculation letter to guide you on how to claim your refund.
You can claim your refund online or opt to receive a check by mail.
HMRC highlighted, “Recall receiving a notice about a tax refund but didn’t take action? Last year, nearly 1 million individuals failed to collect the money owed to them.”
Incorrect tax codes could result in owed refunds, as they indicate the amount of tax to be deducted from your earnings.
The standard code, 1257L, applies to those with a single job or pension, but not everyone falls under this code.
Several factors could lead to an incorrect tax code assignment, such as starting a new job or providing incorrect income information to HMRC.
To identify your tax code, review your recent payslip or P45 if you recently left a job.
If you are owed a tax refund due to overpayment, you can claim it by contacting HMRC at 0300 200 3300 or using the HMRC app.
In cases of underpaid tax, you would owe HMRC the outstanding amount, so it is advisable to address this promptly to avoid facing a larger bill.