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Why you could have paid too much or too little tax

You might have paid the wrong amount of tax because:

• your employer used the wrong tax code
• you had an emergency tax code
• you only worked for part of the year
• you had more than one job at the same time
• you didn't tell HMRC about benefits you got through your work
• your circumstances changed - perhaps you were made redundant
• you're self-employed
• you've got other income like investments or rental income
• you made a mistake on your tax return
• you're on a low income but you paid tax on your savings
• HMRC made a mistake with your tax

All of these things and more can mean you pay too much or too little tax.

Paid too much tax through your employment or company pension

You can claim back the extra tax. HMRC calls any money they pay back a 'repayment'.

Claiming refunds for the current tax year

Tell HMRC why you think you've paid too much. If they need more information, they will tell you what paperwork to send.

You might get a new tax code, meaning any refund will be added to your wages or pension.

Claiming refunds for previous tax years

You'll need to write to HMRC to get any refund due. Include paperwork about your earnings in the tax year you're claiming for, like:

• payslips
• forms P60 and P45
• details of your employment - including any employee benefits you got

They will work out how much tax you're owed and send you a repayment in the post or by bank transfer.

In most cases you'll get back the tax you've overpaid as long as you claim on time. The time limits for claiming a refund are shown in the table below. If you don't make a claim within the time limit you'll miss out on any refund due.

Time limits for claiming back tax

• Find out how to reclaim tax if you've overpaid through your job

• Find out how to claim if you've overpaid tax through your pension

• More information about claiming a tax refund when you stop work

Paid too much tax after filling in a Self Assessment tax return

There are two ways of claiming a refund, depending on the tax year you're claiming for.

Claiming for the last tax year

If you've made a mistake on your tax return, you've got 12 months from the return deadline to correct it. This is called an 'amendment'.

If you filled in a paper tax return, write to HMRC, telling them what corrections to make to which boxes on the return. If you filed your tax return online, you may be able to make your amendment online. Find out more by following the link below.

• Correcting your tax return and claiming any refund

Claiming for previous tax years

If you didn't fill in a tax return for the year in question, write to HMRC and tell them why you're claiming. If you did fill one in, write to HMRC and ask to claim 'overpayment relief'.

In most cases you'll get back the tax you've overpaid as long as you claim on time. The time limits for claiming a refund are shown in the table below. If you don't make a claim within the time limit you'll miss out on any refund due. But if HMRC has made a mistake you can get extra time.

Time limits for claiming back tax

• Correcting your tax return and claiming any refund

Owed tax back on savings or investment income

Tax is automatically taken off the interest on your savings and income from life annuities at the rate of 20 per cent.

If you're on a low income, you may be able to get back some or all of the tax you've paid. You'll have to fill in a claim form.

In most cases you'll get back the tax you've overpaid as long as you claim on time. The time limits for claiming a refund are shown in the table below. If you don't make a claim within the time limit you'll miss out on any refund due.

Time limits for claiming back tax

• Getting tax-free interest on savings or claiming tax back

If you've paid too little tax

This is called an 'underpayment'. HMRC will usually write to you and explain why it's happened and how they will collect the extra tax you owe. You may have to pay some interest on the tax too.

Underpayments of less than £3,000

HMRC will normally give you a new tax code and they will ask you to pay back the tax you owe in one year.

If you want to you can pay it back straight away in one lump sum. This is called a 'voluntary payment'. Call the telephone number on the letter you received from HMRC and ask for a payslip.

• How underpayments of tax affect your tax code

Underpayments of £3,000 or more

HMRC will ask you to pay the money within one month or by 31 January following the end of the tax year you've underpaid - whichever is later. Fill in the payslip HMRC sent to you with their letter and send it back with your payment.

Sometimes HMRC will arrange for you to pay the tax back through the Self Assessment system.

If you can't afford to pay the money you owe

Call the telephone number on the letter you received from HMRC and tell them why you can't afford to pay. You may have to give them rough figures for your income, spending, savings and other assets. They may let you spread the payments over more than one year.

How to correct 'over-repayments'

If you claimed a refund and HMRC paid you back too much it's called an 'over-repayment'. If this happens they will write to you explaining why and how they will collect the money back.

• Contact HMRC Opens new window

More useful links

• New penalties for errors on tax returns and documents Opens new window

Useful contacts

• Money, tax and benefits contacts

• National Insurance Contributions Office