What Should You Do If You’ve Paid Too Much Tax Through PAYE?

Have you looked at your latest wage slip and realised that something’s wrong. If so, you might have had too much tax deducted. This week Prestige Tax and Trust Services asks; what should you do if you’ve paid too much tax through PAYE?

What is PAYE?

The Pay As You Earn (PAYE) system is the method the government uses to remove tax from your wages. Your employer deducts tax and national insurance contributions from your wages. They use a specific tax code to determine how much to deduct.

Claim a refund from the current tax year

Employers aren’t infallible. For any number of reasons, you may find that an incorrect amount of tax has been deducted from your wages. If this happens, you can claim a tax refund, but how you claim depends on when the mistake occurred.

If you’re looking to claim for the current tax year the process is simple. Check the tax code on your wage slip. If you’ve had too much tax taken from your pay then it’s highly likely you’ve been assigned the wrong tax code. If this is the case inform your employer and they’ll take the appropriate steps to refund you through your wages for the rest of the tax year.

Claim a refund from a previous tax year

The process is slightly more complex if you’re looking to claim a refund from a previous tax year. The law allows you to claim refunds from the previous four tax years. Before you do anything else, you need to check if you’ve paid the correct amount of tax.

If you haven’t, you can claim a rebate online. You’ll need your PAYE reference number to lodge a claim; you’ll find this on your P60. This online form will check your identity through GOV.UK, which is why you’ll need a valid UK passport/UK photo card driving license and access to your financial information.

Alternatively you can call or write to Her Majesty’s Revenue and Custom’s (HMRC). To do this you’ll need your national insurance number, details of your job/state benefits and forms such as your P45 or P60 if you have them.

In either case, HMRC may contact you for more information. If they’re satisfied with your claim they’ll send a refund either directly to your bank account or by cheque (also known as a ‘payable order.’) Alternatively, they’ll contact you to tell you why your request for a refund has been denied.

Prestige Tax and Trust Services

Tax is complex at the best of times. If you want to make sure you have the ability to claim a refund if you’ve been paid too much tax, let Prestige Tax and Trust Services lend a helping hand. We have an experienced legal team that specialises in tax-related matters.

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