Over eight million employees received refunds for overpaid tax in the 2022/2023 tax year, with HMRC paying out a staggering £8.3 billion in refunds, according to recent figures. The most common reason for overpayment is being assigned the incorrect tax code.
More than eight million employees received refunds for overpaid tax in the past year, with HMRC refunding a staggering £8.3 billion in overpaid taxes during 2022/2023, according to recent figures revealed through The Sun's Freedom of Information (FOI) request. The data indicates that each worker received an average refund of £943. The most common reason for overpayment is being assigned the incorrect tax code .
Employers provide these codes, which determine the amount of income tax deducted from earnings, via HMRC to their employees or anyone paid through PAYE. Therefore, it is crucial for workers to ensure they are on the correct code. A job change is often the primary cause for individuals being allocated the wrong tax code. Other factors could include transitioning from self-employment to employment or juggling multiple jobs simultaneously. However, having the wrong tax code does not only lead to overpayment - it can also result in underpayment, leaving workers owing money to HMRC. At the end of each tax year on April 5, HMRC issues P800 letters informing individuals if they have overpaid or underpaid taxes, reports the Express. The FOI request also discovered that approximately 2.32 million repayments were made to those who submitted self-assessment tax returns during the same period, amounting to £5.2 billion, as reported by the Sun. Consumer rights specialist Martyn James said: 'The fact that HMRC can't say definitively how many people overpaid tax tells you all you need to know about the complexity of the current tax regime.' He added: 'There's no easy way to know if you've overpaid tax and even accountants that I speak to despair about identifying problems and obtaining refunds and corrections.' James also said: 'Sadly, you're looking at an hour on the phone to establish if you've been overpaid - or potentially years to get a refund 'automatically'. A word of warning. Don't use those businesses that charge a fee to find your tax refunds.' He further explained that these services do not offer any special access: 'In practice, they don't have a back door to a secret, efficient service. It's exactly the same process we all face.' The precise number of taxpayers who have overpaid during the 2023/24 tax year will remain undisclosed by HMRC until early May 2025
TAX REFUNDS HMRC TAX CODE TAX OVERPAYMENT SELF-ASSESSMENT PAYE
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Millions Receive Tax Refunds as HMRC Pays Out Billions in OverpaymentsOver eight million employees received tax refunds for overpayments in the past year, with HMRC paying out £8.3 billion in 2022/2023. The most common reason for these overpayments is being assigned the incorrect tax code, highlighting the importance of workers verifying their codes. Experts warn about the complexity of the tax system and the difficulty in identifying overpayments, urging caution against businesses charging fees for tax refund services.
Read more »
HMRC issue £100 fine warning to millions of people due to file tax returnSome 3.4 million people have around a week left to file their tax return as HMRC warns missing the deadline on January 31 will result in an immediate £100 penalty
Read more »
HMRC to Eliminate Costly Tax Issue Affecting Millions of PensionersHMRC is set to eliminate a costly tax issue that has left millions of pensioners £3,900 out of pocket. Emergency tax codes applied to state pensions by the DWP since 2015 reforms have resulted in overtaxation. Starting in April, these codes will be replaced with regular tax codes, ensuring the correct tax is deducted in real time. HMRC is also working on a solution for those who don't make monthly pension withdrawals.
Read more »
HMRC Launches New Disclosure Service for Companies with Historic R&D Tax Relief ErrorsIn response to widespread concerns about fraud and errors in R&D tax claims, HMRC has introduced a new disclosure service for companies that may have overclaimed relief in past years. The service aims to encourage voluntary compliance and address historical inaccuracies.
Read more »
Don't Delay, File Your Tax Returns Now to Avoid HMRC Fines and Long Hold TimesWith the January 31st deadline approaching, taxpayers are urged to file their self-assessment returns promptly to avoid potential fines and lengthy wait times on HMRC's helpline.
Read more »
HMRC Advises on Tax Implications of Selling Unwanted Christmas Gifts OnlineThe UK's tax authority, HMRC, has issued guidance regarding the tax implications of selling unwanted Christmas gifts online. Personal items sold occasionally, such as clothing, electronics, and furniture, are not subject to income tax. However, capital gains tax may apply to high-value items (over £6,000) or sets of items. HMRC emphasizes that individuals should assess if they need to declare their income, even if it's not taxable.
Read more »