Even if they then claim out of work benefits, the amount of taxable benefit received each month will be less than the tax-free income to which they are entitled. This will leave unused tax-free income available to use against their earlier income from employment.
What action should I take? Some refunds will be given via the payroll, once HMRC has the necessary information. Other refunds need to be claimed. In other cases, claiming a refund will simply speed up the process meaning that the individual gets their refund sooner. Stopping work and claiming benefits Anyone who claims benefits after stopping work should give the P45 from their former employer to the Jobcentre plus.
Jobcentre plus will then issue any refund due at the end of the tax year, or at the end of the claim, if sooner. Stopping work and moving abroad If you stop working in the UK part-way through the tax year in order to live or work abroad, you may be due a refund. If you have not received a P tax calculation from HMRC, and you have overpaid tax, you will need to make a claim for a tax repayment. Using this information, HMRC carry out an automatic reconciliation at the end of each tax year, to work out whether or not you have paid the right amount of tax.
This calculation will show you what tax HMRC think you should have paid. You must always check your P tax calculation carefully, as HMRC may not have all the information they need to calculate your tax correctly, or they may have inaccurate information. If HMRC think you have overpaid tax, they will send you a repayment of tax automatically — you do not need to make a claim.
If HMRC think you have not paid enough tax, they will write to you explaining that they intend to collect the underpaid tax through your tax code or telling you how you can repay it to them. If you receive employment income or pension income and pay tax through the PAYE system you may sometimes pay too much tax.
There are various reasons for this. HMRC provide a list of typical reasons for an overpayment of income tax arising on employment income.
They also provide a list of reasons why an overpayment might arise on pension income. If you think you have overpaid tax through PAYE in the current tax year, before the end of the tax year tell HMRC why you think you have paid too much. Thank you for your feedback. Report a problem with this page. What were you doing? What went wrong? Email address. Do I need to complete a tax return?
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