HMRC is advising numerous taxpayers to verify if they are entitled to a tax refund, with an average refund amount of £473 being returned. One common reason for potential overpayment of tax is being assigned an incorrect tax code, particularly when switching jobs recently.
For the current tax year, the prevalent code is 1257L for individuals with a single job or pension, allowing a tax-free threshold of £12,570 annually as the personal allowance. Various factors could lead to overpaid tax, such as incorrect splitting of personal allowance for individuals with multiple jobs or potential excess tax on pension income.
HMRC recently disclosed plans to dispatch approximately four million P800 tax refund letters from June to August. They have now issued a new communication on X, formerly known as Twitter, encouraging individuals to investigate if they are due any refunds.
If you suspect that you are owed a refund, you can make a claim online via GOV.UK using the reference number from your P800 letter and your National Insurance number. In cases where the tax code has been inaccurately set for an extended period, you may reclaim overpayments for up to four additional years. HMRC might consider repayment beyond four tax years in specific situations where they are at fault for the overpaid tax.
MoneySavingExpert.com has cautioned the public about potential scammers impersonating HMRC and emphasized that HMRC typically communicates about owed taxes through official letters and not via text, email, or phone calls.