Many people think that they must wait until the end of the tax year to reclaim any tax overpaid. This is not the case, and it is now quite simple to do with dynamic PAYE coding and the online personal tax account.
Young people who have worked during the summer break to build up savings for living at university may have had too much tax deducted from their wages. This happens because £987 of their personal allowance is set against PAYE income each month, but over the whole year they may earn less than the full allowance of £11,850.
If the student doesn’t plan to earn a wage during the Christmas break, it would be worthwhile claiming a tax refund. This can be done by applying through their online personal tax account, or by calling HMRC. However, if making the claim by phone the taxpayer should note the date and time of the call, who said what, and the name of the HMRC adviser.
Tax refund claims can be made for the previous four tax years as well. Your children may need a bit of extra cash at this time, as they head off to University.
LITRG has produced a really helpful online tax guide for students covering all they need to know about tax, including some proforma letters to claim tax refunds.
Written by the Tax Advice Network