HMRC's latest figures reveal that more than 730,000 PAYE tax refunds went unclaimed last year. The average refund was worth £855. That's a significant sum to miss out on, especially when claiming it takes just a few minutes.
The reason so many people are missing out is a rule change that came into effect in May 2024. HMRC no longer automatically issues PAYE refunds. If you're owed money, you now have to actively claim it yourself.
🤔 Why Might You Be Owed a Refund?
You don't need to have made a mistake or had a payroll error for a refund to be due. The most common reasons are:
- You didn't work for the full tax year
- You changed jobs or working hours during the year, which affected your tax code
- You're a pensioner with an incorrect amount of state pension included in your tax code
- Your tax code was simply out of date or wrong
HMRC carries out an end-of-year reconciliation and sends a P800 tax calculation letter to people who have overpaid. If you've received one, that's your prompt to act.
📱 How to Claim Your Refund
You can claim in four ways:
- Through the HMRC app (the quickest and easiest route, according to HMRC)
- Via HMRC's online bank transfer service
- Through your Personal Tax Account at gov.uk
You'll typically need your P800 reference number and your National Insurance number to hand. Online refunds take around five working days to arrive. Cheques can take up to six weeks.
Before you claim, it's worth checking that you agree with the P800 calculation and that all your income information is correctly captured.
📣 A Note for Employers
Employers cannot claim P800 refunds on behalf of their employees, but HMRC's February 2026 Employer's Bulletin asked employers to remind their staff to check whether they're owed anything. If you have employees who don't have other sources of income, they may not realise they need to make the claim themselves.
Not sure whether you're on the right tax code, or want to check your overall tax position? Your Client Manager is here to help. Give us a call or drop us an email and we'll take a look.