If you are – or were – an expat living in a foreign country, it’s not uncommon for you to feel overwhelmed by an entirely new tax system. Many expats who have lived and worked in the UK don’t know that they could be due a tax refund, let alone how to claim it. Here we explain the two ways to claim back your UK tax refund.
What is a tax refund?
A tax refund is a repayment of PAYE tax that you have overpaid during the tax year. You might be eligible for a tax refund if:
- You’ve only worked for part of a tax year
- You’ve worked for more than one employer in a tax year
- You’ve had two or more jobs at the same time
- You’ve been taxed on a basic rate tax code
- You’ve left the UK before the end of the tax year (6 April – 5 April the following year)
- You’ve been on an incorrect tax code at any point in the last five years
In order to get your tax refund, you need to claim through an agency or take the solo route by claiming through HM Revenue & Customs (HMRC). The route you choose to claim your refund depends completely on your personal preference and what works best for you.
What do you need to do when claiming through an agency?
- Complete the online tax refund claim form
- Specify how you would like to receive your tax refund claim pack
- Provide the agency with your employment history details
- Post or email the claim pack back to the agency and provide them with your original P45s from each employment and original P60s from each financial year
- Thereafter, your refund will be made. This takes roughly 6-12 weeks.
Claiming through an agency tends to be quicker because a good agency will often specialise in tax and nothing else. It’s probable that you will get a better service this way. But when it comes to going solo, there are a few pitfalls to take note of.
What do you need to do to submit a claim yourself?
- Gather all relevant documents together
- Send your tax forms to the correct tax office
- Keep in touch with HMRC about the status of your refund and ensure that you receive the correct amount
The amount of time it takes for you to receive your refund depends on your case, and whether there are complications or not.
Take a look at the below worst-case scenario to find out what these pitfalls are.
- Before starting your claim through HMRC, you realise that you’ve lost your original P60s and P45s.
- Therefore, you submit a statement of earnings instead of submitting the above documents.
- You submit your tax refund forms to Inland Revenue. A few weeks later, you are notified by HMRC, who lets you know that you submitted your forms to the wrong tax office.
- You then re-submit your forms to the correct tax office, prolonging the process.
- After some time, HMRC contacts you, and lets you know that they have lost some of your documents.
- You get hold of these and begin the process all over again.
- After six long weeks, you phone HMRC to find out how your claim is coming along. They tell you that it’s been sent out. But then you discover that they have sent the cheque to the wrong address.
- You cancel the cheque and give HMRC the right address. This takes another two weeks.
- 20 weeks later, you receive your refund. The refund you receive may or may not be correct. Because of the above complications, it’s possible that your refund is incorrect.
Although the above examples are unlikely to happen all at once, it’s best to be prepared and know what to expect so that you can deal with the situation accordingly. Remember, do research on each of the above options before claiming your refund. If you choose to use an agency, make sure that you do extensive research on the agency before going through with your claims.
About The Author
Shannon Norman is a writer for 1st Contact, a company that provides a wide range of services to people wanting to work and live in the UK. To find out more about what 1st Contact offers, you can visit their website: www.1stcontact.com.