Almost six million people are due a refund from HMRC after overpaying tax.
New figures reveal more than 5.6 million people overpaid £3.5bn in income tax in the 2023/24 financial year. There are many reasons why you can end up paying too much tax, including if you have been placed on the wrong tax code.
It is down to each individual to check if their tax code is correct – but if yours is wrong, and you’ve overpaid tax, you can claim a refund.
For most people with one job, the most common tax code is 1257L. This shows you are entitled to the tax-free personal allowance, which for the current tax year is £12,570. You can check your tax code by looking at your latest payslip.
Neela Chauhan, partner at UHY Hacker Young, an accountancy firm that uncovered the figures through a Freedom of Information request, said: “Millions of people are paying the wrong amount of tax simply because HMRC is almost guessing what they earn.
“For too many people, this will go completely unnoticed. Individuals must check their tax codes and year-end PAYE summaries for mistakes. Particularly those with any form of non-PAYE income or company benefits.”
An HMRC spokesperson said: “Everyone is responsible for ensuring their own tax code is correct, and they can manage and update their details quickly and easily via the HMRC app or their online tax account.
“Customers should also discuss any tax code issues with their employer first. The vast majority of repayments are paid promptly, and we are investing £500million in digital services to help customers pay the right tax first time so fewer refunds are necessary.”
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