CIS Tax Refund and Income tax returns

What is a tax refund?

A tax refund is money which has been returned from tax which has been overpaid. There are many reasons why you have overpaid tax, including:

  • You are taxed under an emergency code for a while when you start a new job.
  • If you have married or formed a civil partnership and you, your spouse or civil partner is born before 6th April 1935.
  • If your employer does not use the correct tax code or HM Revenue and Customs (HMRC) sends the wrong tax code to your employer.
  • You make payments on account for the following year, under the Self Assessment scheme, as you are Self-Employed. The payments are too high because of a change in circumstances, for example, the business profits have decreased. You may not have made a claim to reduce your payments on account and your final tax liability turns out to be a smaller amount than the tax you have actually paid.

You are a pensioner and your tax free personal allowances or receive more than one occupational pension has not been billed properly so you have paid too much tax.
You have multiple jobs. The employer at your second job will automatically deduct tax using the BR code (Basic Rate) so you may not get the benefit of all your personal tax-free allowances. This will frequently apply if you are a low-paid worker or a student.

Refunds under PAYE or Self Assessment

You can make a claim for a tax refund if you overpay tax under PAYE or Self Assessment.

For more information about claiming tax refunds if you become unemployed or for overpayments made because of your job, you can have a look at GOV.UK website at:

Refunds following a death

An overpayment of income tax may occur following a death. There is more information about this, which could be found on the GOV.UK website. Usually if a tax refund is made, the refund is counted as part of the asset for the person who has passed away.

Savings interest, Tax Refund

You may pay excessive tax on savings interest. You can make a claim for a tax refund if this is the case. To find out information of how you can get your interest tax free and claiming a tax refund on interest that you have paid tax on at the HMRC website. Go to:

Overpaid on pensions or on cashing in small pensions, Tax Refund

You may pay too much tax when you cash in a small pension or on your pension. You find more information about claiming a tax refund for being overpaid on a pension at the GOV.UK website.

The time limit for claiming a tax refund

Claiming a tax refund, the time limited is four years from the end of the tax year, the tax year for which you paid too much tax. A tax year runs from 6th April 20X2* to 5th April 20X3* the following year.

You might be entitled to a tax refund and if you think you are entitled for tax refunds claim today so that you don’t lose the right to claim your money back.

Interest on refunds

HMRC must pay interest on a refund of tax if the repayment has been made after 31st January following the end of the tax year in which you overpaid the tax.

*Years are given as an example to show the split of the tax years.