Am I paying too much tax?
Millions of UK workers overpay income tax every year — and most never know. Here are the 8 most common causes, and exactly what to do about each one.
1 in 3
UK employees is thought to be on the wrong tax code at some point
£350
Average annual overpayment for someone on the wrong code
4 years
How far back you can claim a tax refund from HMRC
8 reasons you might be overpaying
The most common causes of overpaid tax.
Wrong tax code
The most common reason. If your employer or HMRC has assigned you the wrong tax code, you could be paying tax on money you're entitled to keep. The standard code is 1257L for most people. Codes like BR, 0T, or D0 applied to your main job are almost always wrong.
Emergency tax code
When you start a new job without a P45, or HMRC can't verify your details, HMRC puts you on an emergency code (1257L M1 or 0T M1). This often means you pay too much tax until your code is corrected. HMRC corrects this automatically, but it can take months.
Two jobs with wrong code allocation
If you have two jobs, only one job should have your personal allowance applied to it. If both jobs use a standard code with a personal allowance, you'll under-pay — but if neither does (both on BR), you'll overpay. HMRC should split it automatically, but errors are common.
Stopped working mid-year
If you left employment partway through the tax year, you paid tax as if you'd earn that salary for the full year. Since you didn't, you're owed a refund of the 'unused' personal allowance for the remaining months. This doesn't happen automatically — you need to claim.
High income child benefit charge not accounted for
If you or your partner earn over £60,000 and receive Child Benefit, you may owe a High Income Child Benefit Charge via self-assessment. Conversely, if you claimed Child Benefit and shouldn't have paid full benefit, adjustments may be owed.
Pension contributions not claimed via self-assessment
If you contribute to a pension via 'relief at source' and are a higher-rate taxpayer, your provider only claims 20% basic-rate relief on your behalf. You must claim the additional 20% (or 25% in Scotland) yourself via self-assessment. Many people miss this.
Marriage Allowance not claimed
If you're married or in a civil partnership and one of you earns below £12,570, the lower earner can transfer £1,260 of their personal allowance to the higher earner — saving up to £252/year in tax. Many couples don't know about this.
Expenses not claimed (self-employed / PAYE)
Employed people can claim tax relief on job-related expenses not reimbursed by their employer — professional subscriptions, uniforms, mileage above 45p/mile. The average unclaimed relief is £120/year. You can backdate 4 years.
Step 1: Check your tax code.
Your tax code is printed on your payslip, your P60, and in your HMRC personal tax account. The most common correct code is 1257L — this gives you the standard £12,570 Personal Allowance. Any deviation from this is worth investigating.
Step 2: How to claim your tax refund.
If you've overpaid tax, there are three ways to get it back:
Through self-assessment
If you complete a self-assessment tax return, any overpaid tax will be shown on your return and refunded automatically (usually within 5 weeks of filing).
Via your HMRC Personal Tax Account
Log in at gov.uk/personal-tax-account. Under 'Check your Income Tax', you can see if you've overpaid and request a refund directly. This covers the current and previous tax year.
Using a specialist tax refund service
Services like RIFT and TaxBack check up to 4 years of payslips for free and handle the HMRC claim process for you. They take a commission (typically 28–35%) from any refund — but you pay nothing if there's no refund to collect.
Think you've been overpaying tax?
RIFT Tax Refunds check your last 4 years of payslips for free. No refund, no fee. Average claim is £1,650.
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