PAYE tax refunds

Overview

If you receive employment income and/or pension income and pay tax through the Pay As You Earn (PAYE) system, you may sometimes pay too much tax.

In many cases at the end of the tax year, too much tax has been paid simply because of the way the PAYE system works and no-one is ‘at fault’.

PAYE tax refunds most commonly arise from the following circumstances:

• If you work for less than the complete tax year – for example, you only started working during the tax year, or you stopped working during the tax year – this could result in you being on an emergency tax code for a while
• You had more than one source of PAYE income at the same time
• If you have been working on a casual basis
• If you are a student, you work only in the holidays
• Your employer or pension provider was using the wrong tax code
• Other income which HMRC tax through your tax code has reduced
• Your circumstances changed, for example you changed from full-time to part-time work
• If you are a pensioner, the amount of state pension in your tax code is wrong
• If you are a pensioner, you paid too much tax on a pension lump sum

In some of these circumstances, you will probably only have received part of your tax-free personal allowance under PAYE when actually you are entitled to a full year’s amount.

If you are a pensioner, you might overpay tax under PAYE because of an emergency tax code where you take money flexibly out of your pension – see our separate guidance on flexible pensions for more information. If you have overpaid tax and you have taken a lump sum from a defined benefit scheme (sometimes known as trivial commutation), look at our separate guidance on trivial commutation and small pensions.

Below is a further example of how a PAYE tax refund might arise.

Automatic reconciliation process

In many cases, HMRC’s automatic reconciliation system should aggregate your pay and tax details after the end of the tax year and work out whether you are due a tax repayment automatically. You should also receive a P800 tax calculation. It is important that you check the calculation, and that the repayment due is correct.

HMRC used to issue many repayments automatically. However, with effect from 31 May 2024, HMRC are no longer issuing all repayments automatically. Instead, if your P800 calculation shows that you are due a tax refund, you will probably have to actively claim the refund in order to receive it. We explain more about how to do this below.

P800 tax calculations are usually issued in the summer months following the end of the tax year. But what if you do not want to wait for a P800 calculation, or you don’t receive a P800 calculation for the year in question?

If you have paid too much tax through your employment and the end of the tax year in which you have overpaid tax has passed, you should be able to prompt HMRC to reconcile your position/issue your refund by contacting them. There is more information on how to do this below.

There is more information on what to do if you think you have overpaid tax through PAYE in the current tax year below.

P800 shows a refund is due

If your P800 calculation shows that you are due a refund, it should also tell you how you can get your tax refund. There are two main types of P800 tax calculation letter – the type you receive will determine your options for getting your repayment.

  Check the wording of your P800 tax calculation carefully, so you know what to do.

P800 tax calculation – you can claim online

If your P800 tax calculation says you can claim your tax refund online, you must take action to claim your tax refund. If you do not claim it, you will not receive it. It will stay on your tax record until you take action to claim it – the refund won’t be lost if you fail to act within a certain timeframe.

HMRC have introduced a new online bank transfer service. You can use HMRC’s online tool to obtain your repayment through the online bank transfer service or to request a cheque. If you want to use the online bank transfer service to obtain the repayment, you must have online banking.

To use the online bank transfer service, you will need online banking set up with your bank, your National Insurance number and the reference number from your P800 tax calculation.

If you do not want to use the online bank transfer service, have lost your P800 tax calculation or have not set up online banking with your bank, you can also claim your tax refund in the following ways:

• through your Personal Tax Account (PTA) – ask HMRC to pay the refund into your bank account via BACS
• through the HMRC app – ask HMRC to pay the refund directly into your bank account via BACS
• contact HMRC by telephone and ask them to send you a cheque. HMRC’s contact details are on GOV.UK.

If you claim an online repayment, you should receive this within five working days. If you request a cheque, it should arrive within six weeks.

P800 tax calculation – you will get a cheque

If your P800 calculation states that you will receive your repayment by cheque, you do not need to contact HMRC. HMRC should send you a cheque automatically by post and you should receive it within 14 days of the date on your P800 calculation. In this case, it is not possible to request a bank transfer.

   You should make sure HMRC have an up-to-date address before HMRC issue a refund via cheque.

Why you should check your P800 tax calculation

Before you accept any refund, make sure the repayment is correct, because:

• The P800 calculation is only an estimate, produced by HMRC’s systems. As such, the calculation can only be as good as the data held on their systems.
• HMRC might have got something wrong, so the repayment could be too much or not enough.
• If HMRC repay you too much and you do not tell them, they could charge you a penalty, if they think you were careless in not spotting the over-repayment. Of course, you would also have to send back the amount overpaid to you.

HMRC guidance on P800 tax calculations and how to get your tax refund is on GOV.UK. This includes a link to the online bank transfer service.

Small repayments

If you are due a repayment of less than £10, HMRC only repay it to you if you submit a claim – their systems do not automatically issue it. You might not get a calculation, because according to HMRC’s systems, you are not due one.

See below for more information on how to do this.

Earlier year repayments

If HMRC thought you were due tax back for the years 2020/21, 2021/22 and 2022/23 they have probably already sent it to you. But if not, it might be worth checking whether you are due anything back, particularly if you have discovered you have not claimed enough allowances or other tax reliefs in 2023/24 and the same applied to earlier years.

Repayment claims have time limits, so do not delay. But do be careful – if it turns out that you have not paid enough tax in previous years, HMRC might be obliged to collect it if you prompt them to review your situation. You should therefore get your facts straight first.

Note that P800 calculations are cumulative. This means if you receive more than one, the previous years’ balances are taken into account and automatically included in the next year’s calculations.

For the actual amount you should look at the calculations on the P800 from the final year of your tax claim, as this will include everything from the previous years.

Claiming in-year

If you think you are overpaying tax through PAYE in the current tax year (2024/25), then it is likely there is a problem with your tax code. If you are still working or receiving a pension, you should tell HMRC why you think you have paid too much before the end of the tax year.

You can do this online, using your Personal tax account.

If you prefer to telephone HMRC or speak to them via their web chat function, the details for individuals and employees can be found on GOV.UK.

Before you contact HMRC, you will need to gather the following:

• your personal details – such as your full name, address, date of birth and National Insurance number,
• details of each of your employers or pension providers – their PAYE scheme reference number, which should be shown on your payslip, or ask your employer or pension provider for it, and
• estimates of your earnings and/or pensions from each source for the current tax year.

Make sure you keep a note, in a safe place for future reference, of:

• the date and time of the phone call/web chat conversation,
• the name of the adviser you spoke to, and
• what was said by both you and the HMRC adviser (if using web chat you have the option to save a copy of the conversation)

HMRC may already have everything they need to check your position, but you may need to send in more information – if so, HMRC will let you know what paperwork you should supply.

Once HMRC process your information it might be necessary to issue you with a new tax code, meaning any refund will be added to your wages or pension and the amount will generally be paid automatically through the payroll. This will result in a lower tax deduction or a tax refund through PAYE. It is a similar process to getting your emergency tax back – see below.

If the repayment is due towards the end of the tax year and you have already received your final pay or pension for that year, you may have to claim a refund directly from HMRC once the tax year has ended or wait for the P800 process to happen.

If you were working, but have now finished working and won’t have a continuing source of income, for example because you have become unemployed, are returning to studying or are leaving the country, see below to find out how to claim your tax refund. The form to use to claim a repayment depends on your circumstances.

For guidance on your refund position if you stop work because you are made redundant, see our page on Redundancy.

If you are retiring, whether you are due a refund in respect of your paid work will largely depend on if/how you choose to take any pension/pensions you may have. As there are so many options, it will be hard to know what your overall refund position will be at the point you stop work, as this will depend on what happens next.

It may therefore be best to wait until the end of the tax year in order that a full reconciliation of your tax position can be performed.

Claiming after the end of the tax year

If you have paid too much tax through your employment or pension and the end of the tax year in which you overpaid tax has already passed (and you have not received a P800 or need your refund urgently and can't wait for your P800), you can make a claim for a refund. It is probably easiest to do this by writing to HMRC.

If you write to HMRC, mark the top of your letter clearly with ‘repayment claim’ so that HMRC can make sure it gets to the right department.

To write to HMRC, use the address on GOV.UK.

See below for an idea of how to write your letter and what you might include. Generally, your letter should:

• give your full personal details – your name, address and National Insurance number,
• include as much information as possible about your pension or employment, for example, PAYE reference numbers, how much you were paid and how much tax was deducted,
• enclose copies of P60s and P45s if you have them – keep the originals,
• say why you think you are due a repayment,
• say how you would like to receive any repayment,
• be signed and dated in ink.

Keep a copy of your letter and any enclosures and ask the Post Office for a proof of posting in case of later query.

In most cases you can get back the tax you have overpaid, as long as you claim on time. Note, in some cases, you may be asked to complete a form R38 or you may want to enclose this with your letter if you would like your refund paid (mandated) to someone else.

Remember, even if you only want HMRC to look at one particular tax year, HMRC may take the opportunity to look over the four ‘open’ tax years. Therefore, you should review your position for all four tax years before contacting HMRC.

Claiming back emergency tax

If you cannot produce a form P45 when you start a new job, your employer will ask you for new starter information. This enables your employer to pay you without a proper tax code in place, however it can mean that you overpay tax. This is because it is likely to result in HMRC issuing you with an emergency tax code. As soon as your proper tax code is confirmed, and provided the tax year has not ended, the payroll should make the relevant adjustments to repay any overpaid ‘emergency’ tax in-year.

If this payroll adjustment does not happen before the end of the tax year, then HMRC’s P800 reconciliation system should aggregate your pay and tax details after the end of the tax year and HMRC should issue you with any tax repayment automatically.

Claims for employment expenses

If you have spent your own money on things you need for your job, you might be able to claim tax relief, which might result in you receiving a tax refund. There is more information on our page Tax relief for employment expenses.

Work changes

There are various different situations that could arise if your work situation changes at some point in the tax year, for example if you stop work, start work, or change jobs.

Stopping work and starting again

If you have stopped work part way through the tax year but then start working again, provided you are on a cumulative tax code (either because you are continuing with the same employer or you have a new employer but gave them your P45 from your old job) this will give you the benefit of any unused personal allowance from the period when you were not working. You could expect to get a refund of taxes paid earlier in the year, through the payroll or pay slightly less tax to begin with once you start work again, until the spare allowance is used up.

Stopping work and no other income

If you have stopped work part way through the tax year and know that you are not going to have a continuing source of taxable income (including taxable benefit income), you should be able to claim an in-year tax repayment using form P50. This means your refund will be paid within the tax year, rather than having to wait until the end of the tax year.

You should not need to send in your form P45, however if the details on your form P50 do not match HMRC payroll records, then you may be asked to send it in – so keep it somewhere safe.

You may also be able to use form P50 to claim a refund where you become unemployed and know that you definitely will not be working again for at least four weeks. (If you start work again after that, some adjustments may be needed over the rest of the tax year to take into account the fact that you have already had an in-year refund.)

Once you have sent in a P50, if you are entitled to a repayment of income tax, HMRC will send it to you – this may be by cheque in the post, or direct to your bank account if you so request.

You can also nominate someone else to receive the refund and it can be paid by post or directly into their bank or building society account.

Stopping work and claiming JSA or ESA

You cannot use form P50 if you are claiming, or intending to claim, a state benefit such as jobseeker’s allowance (JSA) or contributory/new style employment and support allowance (ESA). This is because some of these benefits are taxable and so will affect the amount of any refund that you can claim.

If you are starting to claim JSA or ESA after leaving your job, you need to give your form P45 to the DWP. They will then put the details from your earlier paid work onto their system. If you are due a tax refund from your paid work, you will not get this refunded until the earlier of:

• ceasing to claim JSA or ESA – in which case your refund comes from Jobcentre Plus; or
• the end of the tax year (for continuing claims).

If DWP do not issue your refund automatically, you may have to contact HMRC to claim it.

Leaving the UK part way through the tax year

If you are not a self assessment taxpayer, and are leaving the UK to live abroad permanently or are going to work abroad full-time for at least one full tax year, you might be able to claim a refund in respect of your pre-departure employment income. This is because you will probably not have used all your personal allowance. You can claim this refund by completing form P85 ‘Leaving the UK – getting your tax right’. You can find the form on GOV.UK.

If you are leaving the UK temporarily, then see the guidance in our page Temporary work abroad.

Lost pay and tax documents

HMRC may ask you to provide various documents, for example a P60 or a P45, if you want to claim a refund of tax.

If you are an employee, at the end of the tax year, you should get a form P60, which is a record of how much you have been paid and the tax that has been deducted. Your employer must, by law, give you a form P60 no later than 31 May if you were working for them on 5 April.

When you leave a job, your employer must give you a form called a P45. It is a record of your pay and the tax that has been deducted in the tax year so far.

If you do not receive these documents, you should request them from your employer and keep them safe.

If you have been given these documents but you have lost them, then you should do the following:

• For a P60, you should first approach your employer to ask them if they can provide you with a copy. Employers are obliged to keep records of pay for several years and so they should be able to provide you with a copy of your P60. The P60 will be clearly marked as ‘duplicate’.
• For a P45, your employer will not be able to provide you with a duplicate but should be able to provide you with a ‘statement of earnings’ on company-headed paper. This acts as a replacement for a P45.

Alternatively, you can contact HMRC. HMRC will be able to provide you with alternative official information regarding the amount of pay that you received and tax that you paid, based on the amounts which the employer has reported to them. You can find contact details for HMRC on GOV.UK.

More information

The time limits for claiming back overpaid tax are set out on our page Tax refunds. This includes information on what to do if you miss the normal time limits for making a claim for repayment of tax.

There is a tool on GOV.UK that will help you work out how to claim a tax refund in various scenarios, including employment related scenarios.

For guidance on your tax refund position if you stop work because you are made redundant, see our guidance on redundancy.

For information on P800 refunds and tax refund companies see our page Tax refund companies.

For information on getting tax back if you have taken money from your pension flexibly, see our page How tax is collected on flexible pension payments.

We have produced some example letters you can use to write to HMRC regarding a tax repayment. These are available in the following formats:

• PDF file to read and print
• Word document to download and use, for personal use only