HMRC has sent out notifications to nearly one million individuals entitled to a tax refund due to overpayment of income tax. The tax authority, in a recent social media post, detailed how it had contacted individuals last year who had paid excess income tax. One common reason for overpayment is an incorrect tax code allocation.
Typically, HMRC sends a P800 tax calculation letter to individuals who have overpaid tax, outlining the process for claiming a refund. Claimants can either request their refund online or await a mailed cheque.
HMRC highlighted that many individuals fail to claim their owed tax refund, urging recipients to take action if they receive a refund letter. An incorrect tax code could result in a refund owed to the taxpayer, with the common code 1257L applicable to most individuals with one job or pension.
Various reasons could lead to an incorrect tax code assignment, such as starting a new job or inaccurate income information provided to HMRC. To verify your tax code, review your latest payslip or P45 if you recently left a job.
Individuals who have overpaid tax and are due a refund can contact HMRC at 0300 200 3300 or utilize the HMRC app to file their claim. Conversely, if tax underpayment occurs, individuals are responsible for repaying the owed amount promptly to avoid increased liabilities.