Nearly half a million taxpayers request refunds from the last tax year
The findings underline the importance of always checking your tax statement for the year.
Wed, 12/11/2019 – 09:58
Around 460,000 people chased HM Revenue & Customs for refunds on overpaid income tax in the last tax year (2018/19).
The figures, brought to light through a Freedom of Information Request by Royal London, the mutual insurer, highlight the importance of checking annual tax statements.
Becky O’Connor, personal finance specialist at Royal London, notes: “Nearly half a million people tried to get overpaid income tax back from HMRC in the last tax year. This goes to show it’s a good idea not to assume the taxman is always right about what he says you owe.”
Some of the reasons HMRC gives for overcharging people income tax are that the taxpayer may have changed jobs in the year or be subject to changes to taxable benefits, which might result in an overpayment of tax.
Therefore, in the run up to the 31 January deadline for self-assessment tax returns, O’Connor stresses how important it is to “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.”
Most individuals wait until January to start the process, although 2,000 people last year filed on Christmas Day.
The majority of those filing will be self-employed, but a large number of families that receive child benefit payments and have an individual income of more than £50,000 will also have to get their tax ducks in a row, even if all their income was taxed at source (through PAYE).
In families where one parent earns over £50,000, the family becomes subject to a ‘high income child benefit charge’. This works out as an effective tax on your income, calculated as a 1% charge based on the amount of child benefit you receive each year for every £100 you earn over £50,000 a year.
For those earning over £60,000, this charge effectively cancels out any child benefit they were otherwise entitled to receive.
You can check your annual income via your P60 or Personal Tax Account, and use HMRC’s child benefit tax calculator.
This article first appeared on our sister website Money Observer