Half a million people overpaid tax: check now
Taxpayers are urged to double check whether they’ve overpaid tax as thousands may be able to claim refunds, according to information obtained by mutual insurer, Royal London.
HM Revenue & Customs (HMRC) said people may have been overcharged where they’ve changed jobs in the year or because they may have seen a change to taxable benefits.
Another reason why people may have paid too much tax is due to PPI. PPI includes 8% interest but this amount could have been subject to tax.
Non-taxpayers and those who have received interest within their personal savings allowance for the year could be eligible to reclaim tax paid on PPI interest, if they have received a payout.
As an example, a £3,000 payout for a PPI policy taken out five years ago would have had around £180 tax paid directly to HMRC, which could be reclaimed.
Claimants should check their PPI statement for details of any tax paid on the interest element of the refund.
How to reclaim overpaid tax
If you think you may have overpaid income tax on savings and investments, fill in the R40 form on the HMRC website. You can claim a refund for up to four previous tax years in most circumstances.
Here are examples where you could have paid more than your share:
- pay from your current or previous job
- pension payments
- income from a life or pension annuity
- a redundancy payment
- a self-assessment tax return
- interest from savings or PPI
- UK income if you live abroad
Becky O’Connor, personal finance specialist at Royal London, said: “This goes to show it’s a good idea not to assume the taxman is always right about what he says you owe. Always check your tax statement for the year and keep a note of any unusual changes to your income that might mean you have overpaid.”