Over 5 Million People Overpay Tax To HMRC In UK – What Can You Do?

More than 5 million people in the UK are overpaying tax to HMRC during the 2023-24 tax year, a freedom of information request found.

Some 5.6 million people are being charged too much income tax, amounting to £3.5bn.

The tax overpayment is due to mistakes on tax codes in the Pay As You Earn (PAYE) system.

Tax codes determine how much tax is taken from someone’s salary each month.

HMRC usually issues the wrong tax code due to:

• company benefits: you no longer receive perks such as healthcare, gym memberships or private healthcare
• extra income: you no longer receive additional income such as rent, dividends or freelance work
• multiple jobs: you no longer have multiple jobs
• incorrect details: HMRC has out-of-date or late employer payroll information

What is a tax code?

Your tax code is made up of letters and numbers. It is used to show how much tax-free allowance you have each year.

Your employer applies the tax code to your salary to calculate how much tax should be taken out.

What can you do?

Making sure you have the right tax code is essential to finding out if you’re overpaying tax.

You can usually check your tax code on your payslip but speak with your HR department or accounts team if you can’t locate it.

Alternatively, you can log into your tax online or via the HMRC app to access your current tax code and other information about your employment history.

If you think your tax code is wrong, it’s important to check that HMRC has all of the up-to-date information about your work history and income.

If you think you’ve paid too much tax, you can submit a form to claim a tax refund online.