You may want to check to see what your tax situation is
HMRC has released an update on tax refunds being sent out to certain taxpayers. There is a key date you may want to note in your diary.
The matter was brought to prominence after a taxpayer posed a question to the group via social media. They originally posted their question shortly before the new tax year commenced.
They said their tax code had previously changed to 978XL. This occurred because they had “been estimated to have underpaid tax and started a new job”.
They were keen to find out whether their tax code would return to the standard 1257L once the new tax year got under way. April 6 marks the beginning of the new tax year, when personal tax allowances are reset. Those on the 1257L code are entitled to the full personal allowance, meaning they are exempt from paying income tax on £12,570 of their earnings each financial year.
Any income above this threshold is subject to the basic tax rate of 20 per cent. In response to the taxpayer, HMRC outlined the standard rules that apply.
Full allowance should refresh
The group said: “If we’ve adjusted your tax code in‐year, then it should only stay in place until April 5 April 2026. Your tax code should return to the full allowance from 6 April 2026 onwards.”
Following the start of the new tax year, the taxpayer had a further query for the department. They asked: “Now the tax year has finished I believe I may have overpaid tax due to the change in my tax code mid year.
“How can I be sure of this or am I mistaken?” HMRC responded: “We will automatically recalculate the year. We aim to start this process from June onwards.”
How to check if you are owed a tax refund
For those who think they’re due a refund, there’s a tool on the Government website to discover how to reclaim the sum. There are numerous reasons why you might overpay tax.
These include paying excessive amounts through income tax or on workplace expenses. Pensioners can also pay too much on their retirement income.
If you’ve paid an incorrect tax amount for the previous year, HMRC may issue you with a tax calculation letter, known as a P800, or a simple assessment letter, to resolve the matter. These letters are usually dispatched between June and March of the following tax year.
Only those who are in employment or receiving a pension receive these letters through the post.
