HM Revenue and Customs (HMRC) has issued a fresh alert reminding taxpayers that nearly one million people may be owed money after overpaying tax. On average, those entitled to a refund could receive around £473, yet many continue to ignore the notices.
A tax refund, also known as a tax rebate, occurs when an individual pays more income tax than they owe during a financial year. Common reasons for overpayment include being placed on the wrong tax code, switching jobs, periods of unemployment, or claiming tax relief for work-related expenses.
In a post on Instagram, HMRC stated: "Remember getting a letter about a tax refund but didn't do anything about it? Last year, almost one million people didn't claim back the money they're owed." The government body added that those who did claim were entitled to an average of £473, though individual circumstances vary.
HMRC typically issues automatic refunds when an overpayment is identified during their end-of-year review, which takes place at the start of April. Taxpayers can also check if they are owed money using the 'how to claim a tax refund' tool on the GOV.UK website or via the HMRC app. Claims can be backdated for up to four tax years, meaning from April 2026, people could claim as far back as April 2022.
If HMRC has not sent a letter, individuals should contact them directly with details of why they believe they have overpaid. Refunds are usually processed within three weeks. Additionally, HMRC has announced that Child Benefit payments may be disrupted in May due to bank holidays.
