UK households could reclaim hundreds or even thousands of pounds in overpaid tax from HMRC, according to tax barrister Andy Wood, founder of Tax Barrister UK. He highlighted three commonly overlooked areas: Marriage Allowance claims, emergency tax on pension withdrawals, and tax relief on eligible employment expenses.
Marriage Allowance claims backdated could be worth more than £1,000, while emergency tax refunds on pension withdrawals have recently averaged almost £4,000. Workers may also claim tax relief on eligible employment expenses from the past four tax years.
Marriage Allowance explained
Mr Wood said: “Marriage Allowance is relatively straightforward, but it can easily be overlooked because couples must actively make a claim.”
“It will not apply to every married couple. Broadly, one partner will usually need to have income below the Personal Allowance while the other pays Income Tax at the basic rate.”
“If a couple has been eligible for several years but has never claimed, the ability to backdate the application could make the refund considerably more valuable.”
“Applications can be made directly through GOV.UK without paying a claims company, although eligibility should always be checked carefully.”
Emergency pension tax refunds
Mr Wood explained: “When somebody makes their first flexible pension withdrawal, the provider may have to apply an emergency tax code on a month-one basis.”
“This effectively treats that single withdrawal as though the same amount will be received every month for the remainder of the tax year. As a result, the initial deduction can be significantly higher than the person’s eventual tax liability.”
“An emergency deduction does not necessarily mean HMRC has made an error, and it does not automatically mean the entire amount deducted is refundable. The correct position depends on the individual’s total taxable income for the year.”
“Where too much has been taken, people may be able to reclaim it during the tax year rather than waiting for HMRC to reconcile their records later.”
Tax relief on employment expenses
Mr Wood said: “Employees sometimes assume that their tax position is automatically correct because Income Tax is deducted through PAYE. However, HMRC will not necessarily know about eligible costs that a worker has paid personally.”
“Tax relief does not usually mean receiving the full cost of an item back. It generally reduces the amount of taxable income by the value of the qualifying expense, so the benefit depends on the person’s tax rate.”
“There are also strict rules around what qualifies. Ordinary clothing and the cost of commuting between home and a permanent workplace will not normally be allowable simply because they are connected to someone’s job.”
“Claims can generally be made for the current tax year and the previous four tax years, so keeping receipts and accurate records could be important.”
He added: “Taxpayers should not assume that a refund will be issued automatically. Checking your tax code, PAYE record, and previous deductions could reveal that too much tax has been paid.”
“At the same time, people should be cautious of firms promising large or guaranteed refunds. A claim should be accurate, supported by evidence, and submitted through the appropriate HMRC process.”
“Any refund will depend on the taxpayer’s individual circumstances, and making a speculative claim could create further problems if the information provided is incorrect.”
