HMRC refunded £8.3billion in 2022/23 (Image: Getty)
More than eight million workers were refunded for overpaid tax in the previous years, it has been revealed. During 2022/2023, refunded a whopping £8.3billion in .
The information was revealed by a Freedom of Information (FOI) request by . The total refund meant that, on average, each worker got £943.
Most people end up paying more tax because they are in the wrong tax code.
are given by employers via to their employees or anyone paid via PAYE. The code, which is shown on payslips, decides how much income tax is paid on earnings. Therefore, it is important that employees check that they are on the correct one.
A change of jobs is the most common why people end up being put on the wrong tax code.
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If you’ve started working for an employer after being self-employed or working multiple jobs at the same time, they could also be reasons why you might be on the wrong tax code.
It’s not just overpaying that could be a result of being on the wrong code, but workers could find themselves underpaying, therefore owing money.
On April 5, the end of each tax year, sends out P800 letters that inform people whether they have overpaid or underpaid taxes. The FOI request found that around 2.32 million repayments were handed to people who filed self-assessment tax returns over the same period, totalling £5.2billion, reports The Sun.
Consumer rights expert Martyn James said: “The fact that can’t say definitively how many people overpaid tax tells you all you need to know about the complexity of the current tax regime.
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Employees should check their tax codes to avoid overpaying (Image: Getty)
“There’s no easy way to know if you’ve overpaid tax and even accountants that I speak to despair about identifying prblems and obtaining refunds and corrections.
“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.
“In practice, they don’t have a back door to a secret, efficient service. It’s exactly the same process we all face.”
The total number of taxpayers who had overpaid their tax for the 2023/24 tax year will not be revealed by until early may 2025.