How Long Does A Tax Refund Take UK?

How long does a tax refund take UK?

It can take up to 8-12 weeks for a tax refund to be credited in the UK. The exact length of time will vary depending on the time of year you make your refund claim and the type of refund you’re claiming. If your refund relates to tax paid for self-employed earnings and you completed a self assessment, then you may receive your refund within a matter of days. If your refund relates to overpaid tax from employment, then this could take longer.

Why might you be eligible for a tax refund UK?

There are a number of reasons why you might overpay tax and be owed a refund.

If you’re self-employed, then you might have earned less than you expected and overpaid your tax. This usually happens because you pay your tax a year in advance through the self assessment method.

If you’re employed, then again, you may have earned less than expected, or you may have been put onto the wrong tax code, particularly if you moved jobs and were put onto an emergency tax code for a short while.

If you’re a business owner and you’ve closed your business down during the tax year, then you could also be eligible for a tax refund. These circumstances are slightly different though so make sure you do your research about making company dormant.

There are a few other, less common reasons why you may be owed a tax refund, but these tend to be the main ones.

Self Assessment Tax Refunds

If you’re self-employed, then you’ll need to complete a self assessment once each year. This will tell you how much tax you owe for the tax year or show any refund that’s due to you.

• How to claim

To claim a tax refund, log into your HMRC online account and click on “Request a payment” – you’ll find it within the self assessment section of your account.

• How Long Does A Tax Refund Take UK if you’re self-employed?

If you completed your self assessment online, then you’re likely to receive your refund fairly quickly, often within a couple of days of being approved. However, HMRC say that you should allow four weeks for your refund to arrive in your bank account. If you’ve been waiting longer than four weeks, then it’s worth contacting HMRC to find out when you can expect to receive your money.

How can you check the status of your tax refund claim?

If you want to check the status of your tax refund, then it’s worth contacting HMRC.

If you completed a tax return online, then you’ll be able to check the status by logging into your account on the gov.uk website.

Otherwise, you can contact HMRC on 0300 200 3300. Make sure you’ve got your details to hand before you call. If you’re self-employed then you’ll need your Unique Taxpayer Reference number (UTR) as well as your full name and address.

Tax refunds on employment income

If you didn’t complete a self assessment and you’re employed by somebody, then it’s still possible that you may be owed a refund.

When you’re employed, your tax code tends to stay the same throughout the tax year, so if your income dropped, then it’s possible that you will have overpaid your tax for that year. Because of this, HMRC may write to you to let you know that you’re due a tax refund. It’s really important that you keep HMRC up to date if you move house, as you don’t want any money you’re owed to go missing!

HMRC will calculate what they owe you themselves and let you know how much you’re going to receive. It’s worth taking some time to check their calculations though as there have been instances where they’ve got this wrong.

How Long Does A Tax Refund Take UK – if you’re employed?

If you’re owed money through the tax you’ve paid on your employment income, then it can take a little longer to come through. You’re looking at anything from a couple of weeks right up to twelve weeks for you to receive your refund.

HMRC will either send a cheque to your registered address, or you might receive the payment directly into your bank account.

Is it possible to speed up your claim?

If you’re self-employed and need to complete a self assessment, then the sooner you do this the better. Whilst it’s true that you have until 31st January the year after the tax year ends to complete your tax return, leaving it until the last minute will only delay any repayment due. Complete your self assessment as soon as you can and ideally do it online. It’s also worth bearing in mind that lots of people do leave their tax returns right up until the last minute, so the earlier you can do it the better. Early February is a very busy time for HMRC calculating tax bills and refunds and you don’t want to get caught up in that.

Sometimes, payments are delayed whilst HMRC carry out extra security checks. There isn’t much you can do to speed this up, they need to be sure that the payment is for the right amount and that it gets sent to the right person.

When should you contact HMRC?

It’s not really worth contacting HMRC until at least a month has passed, they’re likely to just tell you that your refund is being processed if you try to contact them before then.

What to do with your refund money

In most instances, you won’t have budgeted for any money returned to you through a tax refund, so you could look at it as a lovely, unexpected windfall! So, what should you do with that money?

I’m always carefully budgeting our money, and any extra cash that we get goes straight into our house fund. If you’re saving up for something big, then a tax refund could go a long way towards helping you reach your savings goal.

If you don’t already have an emergency fund, then a tax refund would give you a great start. An emergency fund means that you always have a buffer to protect you and your family if you need to find a chunk of money in a hurry. There are all kinds of reasons why this might happen – boiler breakdown, car breakdown, leaky roof, job loss, the list is endless!

If your finances have been in a bit of a mess, then a tax refund can give you a bit of breathing space whilst you take stock and work out where to go from here. It’s worth sitting down and working out your budget, figuring out where you can cut costs and making a plan to improve your situation going forwards.