YOU could get yourself a cash boost in time for Christmas by claiming back tax you’re owed by HMRC.
Millions of workers claim back hundreds of pounds of overpaid tax each year.
The Sun previously revealed over eight million workers got back money in the 2022/23 tax year, receiving £943 on average.
Here are six ways you can claim back cash from the taxman…
Wrong tax code – £943
Many workers end up overpaying as they’re on the wrong tax code.
Anyone employed or paid via PAYE is given a tax code by their employer via HMRC, which shows up on your payslip.
This code dictates how much income tax you pay on your earnings.
People are often put on the wrong tax codes if they change jobs.
At the end of each tax year on April 5, HMRC will send out P800 letters letting people know if they’ve underpaid or overpaid tax.
But you can be proactive and check your code before the letters are sent out to get your cash back quicker.
If you think you’re on the wrong tax code, you can contact HMRC to tell them via phone on 0300 200 3300.
This is usually the quickest way to get a response.
Or, you can send a letter to the following address: Pay as You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS, United Kingdom.
If you are on the wrong tax code and have been paying too much, HMRC will change it so you pay the correct amount moving forwards.
It will also reimburse any tax you’ve already overpaid.
If you claim the money online it will be sent to your bank account within five days.
You can also claim your refund through the HMRC app.
Pension withdrawals – £3,539
Thousands of people each year are also unknowingly paying too much tax on their pension withdrawals.
More than 13,700 people claimed back overpaid tax on their pensions between July and September this year alone, with the payments averaging £3,539.
Under the Pension Freedom rules, if you have a defined contribution pension or a personal pension then you can start taking cash out of your pot when you turn 55.
You’re typically allowed to take the first 25% tax-free, and then everything after that is taxed at the usual income tax rate.
However if you take out a large chunk of your pension for the first time, you’ll automatically be put on an emergency higher tax rate.
You’ll be taxed on what is known as a “month 1” basis, which means it’s treated as though the same amount will come out every month.
If your tax code ends in “M1”, you’re likely affected by the issue.
It can leave retirees facing huge sums being deducted from their pension money.
If you are taking a steady stream of income via drawdown then you shouldn’t need to take any action, as HMRC will adjust your tax code to ensure that over the course of the year you are taxed the correct amount.
But if you’ve made a single withdrawal and think you’ve overpaid tax, you’ll need to fill out one of three forms so HMRC can process your refund.
This is a P55, P53Z or a P50Z form, which can all be found on the Government’s website.
Which form you need to fill out will depend on how you have accessed your retirement pot:
- Form P50Z: If you’ve emptied your pension pot and have no other taxable income (other than the state pension).
- Form P53Z: If you’ve emptied your pension pot but have other taxable income (like a salary or other benefits).
- Form P55: If you’ve only accessed part of your pension pot and will not be taking any more payments during the current tax year from that scheme.
HMRC says it aims to process refunds within 30 days, as long as you fill in the correct form.
The other option is to wait for HMRC to review your tax code at the end of the tax year, but this could leave you waiting a lot longer to get back the money you’re owed.
Uniform costs – £60
You could also be owed cash purely based on your job.
HMRC allows you to get tax relief on certain work uniforms – and, if you’re eligible, you can backdate a claim by four years.
A uniform tax rebate is given to workers who typically wear clothes that identify them as being in a certain profession, like a police officer or nurse.
You can also claim the tax relief if you work in agriculture, on aeroplanes or the construction sector.
There is a full list of professions which qualify for uniform tax relief, which you can see at http://www.gov.uk/guidance/job-expenses-for-uniforms-work-clothing-and-tools.
You can only claim tax relief on work clothing if you have bought, cleaned, repaired or replaced any yourself.
You also won’t qualify for relief if your employer washes your clothes or has a facility offering a cleaning service.
How much tax relief you can get on your work uniform depends on your job, and how many years you are claiming for.
The standard flat-rate expense allowance is £60, but you don’t get all of this.
You get back the amount of tax you would otherwise have paid on that £60. So for a basic rate taxpayer that is 20% of £60, which is £12.
That means if you were claiming for the current tax year and the four years before, you would get £60 overall.
If you are claiming tax relief for the first time you can do it online or by post by filling in a P87 form.
You can find the form here: http://www.gov.uk/guidance/send-an-income-tax-relief-claim-for-job-expenses-by-post-or-phone.
If you are posting the form, you have to send it to: Pay As You Earn, HM Revenue & Customs, BX9 1AS.
You’ll be sent a letter by HMRC if you’re owed a refund with details on when it will be paid.
How to claim tax back on energy bills when working from home
TAX can be claimed back on up to £6 a week to help cover the additional costs of working from home, such as higher energy bills.
Prior to April 6 when the new financial year began, tax could be claimed back on expenses of up to £4 a week.
For those paying the standard tax rate of 20%, £1.20 per week can be claimed.
While for people who pay tax at the higher rate of 40%, £2.40 per week can be claimed.
Additional rate tax payers who pay 45% can claim £2.70 a week.
To claim tax back on working from home costs complete a P87 from online.
It’s fairly straightforward with a Government Gateway account which you may already have or you can set up, or you can complete a paper P87 form.
In the section called “using your home as an office”, you’ll be asked to enter the amount you paid.
You won’t have to show receipts or prove this is how much you spent.
You’ll also be asked to enter the amount repaid by your employer. This will be zero if you haven’t been reimbursed.
If you have been reimbursed you can’t claim back the tax – your employer has already included this.
You usually get the money back by paying less tax, rather than receiving a refund. Your tax code may be adjusted to show this.
The time it takes for this to happen can vary and there are likely to be a larger number of claims than usual so there could be delays.
Marriage Allowance – £1,006
If you are married or in a civil partnership then you may be able to reduce your tax bill by claiming Marriage Allowance.
Every worker has a personal allowance of £12,570.
This is the amount of money you can earn every financial year before you need to start paying income tax.
Marriage Allowance is a special tax rule that lets you transfer £1,260 of your personal allowance to your husband, wife or civil partner.
It can reduce your tax bill by up to £252 every tax year and is free to apply for.
You can also backdate your claim for four years, currently up to the 2021/22 tax year.
To be eligible you need to be married or in a civil partnership and earn less than £12,570.
Your partner must pay income tax at the basic rate, which means their income is between £12,571 and £50,270.
The fastest way to apply for the allowance is online and you get an email confirming your application in 24 hours.
Just keep in mind your refund may take up to two months, so it may be a welcome boost after Christmas if you start the process now.
Claim back Child Benefit money – £209
If you’ve realised you could’ve been claiming benefits, you may be able to get some payments backdated.
Different benefits have different rules regarding backdated pay.
For example, Child Benefit can be backdated for up to three months from the date you make the claim.
The Government pays Child Benefit to parents or other people who are responsible for bringing up a child.
It is currently worth £26.05 for the eldest or only child and £17.25 for every additional child you have.
You can apply to backdate your Child Benefit when applying for the benefit, or you can request your benefits to be backdated by writing to HMRC.
You will have to provide evidence as to why you weren’t able to make a claim earlier.
This could be because:
- The online claims system was down
- You have a disability
- You’re unwell
- You’re making a new claim after breaking up with your partner
If you get the maximum amount for one child in child benefit and you get it backdated for three months, you should receive £208.40 from HMRC.
Your claim could take anywhere from three days days to several weeks to be processed.
