Are you sure that you have not overpaid on tax? With the UK’s tax burden sitting at its highest level since the Second World War, it is arguably even more important in 2024 to ensure a tax-efficient financial plan. Yet how can you find out, and what can you do?

Below, our Carlisle financial planners offer a short guide to discerning your tax liability and how to claim a rebate. We hope these insights are helpful. Please contact us for more information or to speak with a financial adviser:

t: 01228 210 137`
e: [email protected]

Work-related expenses

Many employed people spend their own money on work-related costs but fail to claim them back. For instance, if you are required to hold a professional membership to perform your job (e.g. in medicine, accounting, or law), tax relief is available for these fees if you pay for them.

The same rule applies to work-related equipment, such as computers or tools. If you did not realise this and have already paid several annual fees (without claiming back), HMRC also lets you claim for the previous four tax years.

If you work from home, you may be eligible for tax relief to account for the extra expenses incurred (e.g. broadband, heating and electricity). Up to £420 may be available for one tax year.

To qualify, you cannot choose to work from home. Rather, your employer must have required you to work from home for substantial periods, undertaking “substantive duties”.

Workers can claim for travel costs when using a vehicle for work. However, remember that commuting to and from the office is not included.
As a general rule, try to keep an accurate record of work-related expenses, whether you are employed or self-employed. Store your receipt somewhere safe and readily accessible. Aim to claim as soon as possible, reducing the likelihood of forgetting later.

Incorrect tax codes

Did you know that two-fifths of UK adults who checked their tax code found out they were on the wrong one? Indeed, one study estimates that British workers have overpaid £8.2bn for this reason – not too far off what the UK spends on overseas aid.

It is your legal responsibility to check that you are on the right tax code. If you are paying too little, for instance, then you may get a nasty surprise later when you are suddenly asked to repay it. Conversely, many workers are overpaying and are due a refund.

Unfortunately, the government is unlikely to act on your behalf to determine whether you are overpaying. Rather, HMRC tends to update someone’s tax code when their income changes based on information from their employer. If this information is wrong, you may end up on the wrong tax code – such as “emergency tax” – and overpaying.

Check your payslips and look out for ‘W1’, ‘M1’ or ‘X’ at the end of your tax codes. If present, then you were on emergency tax. It is especially important to review any of the following periods (when mistakes can occur):

  • You started a new job.
  • You become employed after being self-employed.
  • You started receiving company benefits or the State Pension.

What to do if you are owed

If HMRC owes you a tax rebate, then you should be told in a personalised letter at the end of the tax year via the “P800” (End of Year Tax Calculation).

Make sure you check everything carefully before telling HMRC you think you think your tax is wrong. Be careful to declare any overpayments. Failure to do so results in a penalty – plus removal of the repayment back to HMRC.

To contact HMRC, you can do this on the Income Tax Helpline. Ensure you have the key information, such as your name, address, date of birth and National Insurance number. You will also need details of your employer, or pension provider, and estimates of any earnings (and their sources) during the tax year(s) in question.

For past tax years, include the relevant P45s and P60s. If your application for a refund is accepted, it can take between five days and eight weeks to receive a repayment.

Going forward, it might not always be possible to prevent HMRC from placing you on emergency tax. However, you can minimise the likelihood by telling the government as quickly as possible when your circumstances change (e.g. starting a new job).


The above is not an exhaustive list of possible overpayment scenarios. There are other possibilities, such as those who continue to pay National Insurance after reaching their State Pension age. Another scenario involves spouses and civil partners failing to legally maximise their personal allowances and tax bands. Working with a financial adviser can help you fully address oversights in your financial plan.
If you would like to discuss your financial plan and investment strategy, then we would love to hear from you. Get in touch with your Financial Planner here at Vesta Wealth in Cumbria, Teesside and across the North of England.

Reach us via:
t: 01228 210 137
e: [email protected]

This content is for information purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice regarding your affairs please consult your Financial Planner here at Vesta Wealth in Cumbria, Teesside and across the North of England.

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