Check if you’re owed cash due to HMRC error after millions get £661 back

Levi Winchester & Sonia Sharma
·2-min read
Households are being urged to check if they are due money back from HMRC
-Credit: (Image: iStockphoto)


People are being urged to check if they are owed any money from HMRC due to a tax error.

Millions of workers paid too much tax to HMRC last year and received an average of £661 back, it has been revealed. Almost 5.5million people received tax rebates worth a total of £3.57b, according to a Freedom of Information request by The Sun.

The most common reason why you may have paid too much is because you’re on the wrong tax code. This can sometimes happen if you start a new job, if you earn money from a second job, or if there has been a change to benefits you receive.

There are also other reasons why you may be on the wrong tax code. Your tax code is made up of numbers and letters and it tells your employer or pension provider how much tax needs to be taken out of your salary. You can find your tax code on your latest payslip, on your P45 if you have recently quit your job, or on the GOV.UK website if you have a Government Gateway ID.

The most common code for the current tax year is 1257L for people who have one job or pension. This means for the tax year 2024/25, you can earn £12,570 before being taxed, as this is the current personal allowance, reports the Mirror. But not everyone should be on this tax code - for example, you may need a different code if you have more than one job.

If your tax code is wrong for the current tax year, HMRC will contact your employer to correct it and then you should get back any owed tax in your wages. If you have been overpaying tax for some time, you can claim back up to four additional years.

This means you can go back as far as the 2020/21 tax year. But even if you think you have been overpaying for longer than this, it could still be worth getting in touch with HMRC to investigate.

There is no guarantee they will pay you back beyond the four years, but they may do under certain circumstances - for example, if it was their fault that you overpaid tax. It is free to contact HMRC. If you have been underpaying, then you will need to pay your tax back.

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