Households across the UK are being urged to check if they are overpaying on their taxes, as hundreds of thousands of refunds remain unclaimed, according to the latest data from HM Revenue and Customs (HMRC).
Unclaimed Refunds Total £624 Million
Official figures reveal that approximately 730,000 taxpayers missed out on refunds last year, with the average repayment amounting to a substantial £855. This means an estimated £624 million was left unclaimed by those entitled to it.
Anyone due a PAYE repayment should receive a P800 tax calculation letter detailing the amount they are owed, guidance from the tax authority states. However, these refunds are not always automatic, and many individuals may not realise they need to take action.
How to Claim Your Refund
Taxpayers who believe they have been overcharged but have not received a P800 letter can find guidance on the HMRC website on how to submit a claim. Claims must be made within four years from the end of the affected tax year.
Adelle Greenwood, tax manager at the Institute of Chartered Accountants in England and Wales, said: “With more than 700,000 people missing out on a total of £624m in tax refunds last year, we'd encourage all taxpayers to check whether they are owed money from HMRC.”
She added: “Employees who do not have other sources of income may not have realised that it is their personal responsibility to make the claim and are encouraged to do so now.”
Common Reasons for Overpayment
For most employees, tax is collected through the PAYE system, which means it is automatically deducted from wages or pensions. While workers on this scheme typically do not need to file tax returns, mistakes can still occur, leading to overpayments.
Repayments are often owed due to an incorrect or outdated tax code, or because the taxpayer has not been allocated their full personal allowance for the year. Other common reasons include not working for the full tax year, changing jobs or working hours during the year, or for pensioners, an incorrect amount of state pension being included in their tax code.
How to Receive Your Refund
Once a P800 is sent, it is the recipient's responsibility to check their tax code is correct and that all allowable employment expenses are factored in. This could include costs for uniforms, tools, professional subscriptions, and mileage.
The easiest way to claim the money back is using the HMRC app or through a personal tax account on the HMRC website. Bank transfer and cheque options are both available. Online repayments are typically made within five working days, while cheque repayments can take up to six weeks.
Last month, it was revealed that over 170,000 people missed out on their tax refunds in 2025/26 due to not cashing cheques sent to them by HMRC.
