If too much tax has come out of your pay or your Self Assessment return, HMRC owes you money back — and you can almost always claim it yourself for free.
It surprises people how often the taxman owes them rather than the other way round. HMRC issues hundreds of millions of pounds in refunds every year, much of it triggered by nothing more sinister than a wrong tax code or a job that started mid-year. The catch is that a chunk of it never gets claimed.
The PAYE system tries to deduct exactly the right tax across the year, but it works on estimates and assumptions that often turn out to be wrong. When the year closes on 5 April and HMRC reconciles what you paid against what you owed, an overpayment becomes a rebate. Typical triggers include:
Suppose Daniel earns £30,000 a year and his employer deducts tax evenly across 12 months. His annual Personal Allowance for 2025/26 is £12,570, so his expected taxable income is £17,430, giving an annual tax bill of £3,486 (£17,430 x 20%) — roughly £290.50 deducted each month.
Daniel leaves his job at the end of September 2025, six months into the tax year. By then he has earned £15,000 and had around £1,743 of tax deducted. But he is entitled to the full year's Personal Allowance even though he only worked half the year.
His actual liability on £15,000 is just £2,430 above the allowance (£15,000 − £12,570), taxed at 20% = £486. He has paid £1,743 but owed only £486, so he is due a rebate of £1,257. If he does not start another job that tax year, HMRC will repay this after year-end — or he can claim sooner using form P50.
For most PAYE overpayments, HMRC sends a P800 automatically and lets you request the money through your online account. For work expenses you have not yet claimed, use form P87 or your Personal Tax Account. If you are self-employed, any overpaid tax is reconciled through your Self Assessment return rather than a separate rebate process.
The single most important thing to know: claiming is free. Adverts for "tax refund specialists" routinely take 30–48% plus VAT of a refund you could claim yourself in minutes. Start by reviewing whether your code looks right — you can check your tax code to spot the emergency or duplicated-allowance problems that cause most overpayments.
A tax rebate is not a windfall or a bonus — it is your own money, overpaid by an imperfect system, waiting for you to ask for it back.
Sole traders rarely receive a P800. Instead, overpayments surface through Self Assessment — for example, if your payments on account for the year exceeded your eventual liability because your profits fell. HMRC then either refunds the excess or sets it against your next bill. Construction workers under CIS, who have 20% deducted at source by contractors, are among the most likely to be owed a rebate after filing.
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