How To Qualify For A Tax Overpayment

There are about one in three of British taxpayers who are due a tax refund.

Income tax refunds can derive from various sources of personal income.

These sources of income could arise from a self employed business such as a profession or trade or an employment position where tax has been deducted at the time of payment.

If in employment then you might be able to justify a claim for business expenses that have been incurred but not reimbursed by your employer.

The type of trade that might qualify for a tax refund could be a person who provides and uses their own tools like a car engineer.

In these examples you may be able to carrry back the refund claim for up to six years.

Another classic example might be a carer who looks after older folks by visiting them in their own home and would therfore use their own car for transport.

Where a claim for car running costs has not been reimbursed by your employer or has been but at a lower rate than that which can be claimed then you may well be able to make a claim for these expenses

Another way that a UK tax refund may become due is where people leave Great Britian before the end of the tax year and have no likelyhood to come back and take up another job before the end of the current tax year. In those circumstances they will probably be entitled to claim a Tax repayment as they will not have used up all of their personal allowances which under the PAYE scheme build up evenly over twelve months.

Yet another way that you may qualify for a refund could be that you started a PAYE employment part or mid way through a tax year where you were taxed on a month 1 basis. This usually occurs when people work for the first time perhaps. when they first come to the UK.If a PAYE code has been issued as a month or week 1 basis it means that the tax free part of the pay is calculated only on each monthly or weekly monthly payroll and not on an accumulative basis.

So if you commenced your employment half way into the Tax Year and were issued with a month one code then at the end of the tax year you would only have had the use of part of the personal allowances and in that way you would have unused allowances that would give rise to a tax repayment.

Anormal paye code is one which is not on a month one basis will allow the tax free pay to build up evenly over the tax year so that the Tax due would be calculated correctly and in those circumstances there would be no refund due.However more often than not a month 1 paye codewill mean that an income tax repayment may be due. If you are due an income tax repayment it is possible to claim for the past six tax years.

People often ask for how many earlier years can you claim a tax refund for ? If you are due a repayment it is possible to claim back the last six tax years. The British tax year runs from the 6th April to the 5th April in each tax year.

As that very famous advert states"Tax does not have to be taxing" but it is very complicated and in less than plain language.

The documentation which your employer will hand you at the end of the tax year known as a form P60. If you do not have one of these it may be because you left before the end of the tax year in which case you will have received a form P45. If you are unable to find these original documents then you should be able to get a letter of the earnings from your previous employer. This together with a schedule of the dates you started and left with details of your gross income.

Taxes in the UK are quite complicated so it could be a good idea to get an agent to help you get what you are duly entitled too.