As prices continue to soar amid a cost of living crisis, people across the UK are eager to save some cash. Subscriptions are canceled and people wear extra sweaters to avoid turning on the heating.
But people may be able to save without sacrificing the comforts of their homes, as experts have urged people to check whether they might owe a refund of their taxes.
Tax Free Experts, RIFT tax refunds, informed people that there are nine reasons why someone might owe a refund. These range from work expenses to income earned abroad.
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For most people, paying taxes is fairly straightforward. This is done automatically through the Pay As You Earn (PAYE) scheme, while self-employed people must submit a self-assessment form to HMRC every year. But PAYE can sometimes make mistakes and people end up paying more than they have to.
RIFT Tax Refunds CEO Bradley Post commented: “HMRC has a lot of taxpayers to watch and although they are not charged deliberately, mistakes are a part of life. However, the complex rules in place to ensure that everyone contributes an appropriate amount to the economy can make it difficult to know whether or not you are paying the right amount.
“But with the cost of living rising dramatically, it’s more important than ever to check that you’re not paying more than you rightfully should. Although certain professions or aspects of working life are more likely to be reimbursed, you never know how much you might be owed, especially considering that you can legally backtrack on a claim for up to four financial years.
The reasons for refunding your tax are indicated on the government website and explained below. If you overpaid, you must claim the refund using the government online service. If you think you have paid too much tax you should contact HMRC.
Incorrect tax code
HMRC has assigned a code to each taxpayer. However, tax codes change over time and may not always follow your situation. According to RIFT Tax Refunds, this may result in overpayments.
Your tax code will be on any letters you have received from HMRC. If you notice it has changed contact HMRC and ask why it has changed and if you are still paying the correct amount of tax as a result.
If you’re moving from PAID to self-employment, or simply moving from one job to another, confusion can arise. Although HMRC will always try to follow what you are doing and tax you correctly, they can only do this if they have all the required information. If you think you are paying too much tax due to changing jobs, contact HMRC.
If you have regular income from your pension, the tax will usually balance out and you won’t pay too much. But it is possible that the emergency tax will be applied if you claim lump sums. If you pay more than necessary, you can claim it from HMRC.
An annuity converts your savings into an annual annuity, providing you with guaranteed income for life or for a specified period. If your total taxable income is less than your personal allowance, you can ask to receive tax-free the income from your life annuity taken out.
Severance pay is taxable, but experts at RIFT Tax Refunds have warned that overpayments are quite common. If you think you have overpaid, call HMRC and they will check for you and, if applicable, send you a prompt refund.
When you are self-employed, you complete self-assessment forms to help HMRC calculate your tax. It can be easy to make a mistake about this and pay more or less income tax. HMRC usually detects the error quickly and sends an automatic refund. If not, you can call and request one. You can also hire an accountant or financial expert to help you.
Savings interest or PPI
People are allowed to earn a certain amount of interest on your personal savings without paying tax on it. The threshold will depend on your income. You may be liable for a refund if you think you were taxed too much or too soon.
Income from abroad and income abroad
British citizens sometimes earn part of their income abroad, which complicates tax issues. They could pay taxes here and abroad on the same income. You should seek expert advice to ensure that you are not paying too much.
Self-employed people can claim reimbursement for business expenses, from travel to phone bills. But PAYE workers can also claim expenses. You will need to keep a record of expenses and have proof that they are related to your work.
If your employer already contributes to your professional mileage or your travel expenses, if it is lower than the full AMAP rates, you have the right to claim the difference as a reimbursement of the mileage tax.
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