Households urged to make HMRC checks as over 730,000 tax refunds go unclaimed

Households have been urged to check whether they have overpaid on their taxes as hundreds of thousands of refunds are still unclaimed, according to the latest HMRC data.

Anyone required to repay PAYE must receive a P800 tax calculation letter detailing the amount due to be refunded, as per the tax authority’s guidance.

However, these refunds are not always automatic; According to official figures, approximately 730,000 refunds were not requested last year.

The average refund was a significant £855, meaning an estimated £624 million remained unclaimed.

Anyone who thinks they have been overcharged but have not received a P800 from HMRC can find guidance on how to claim on the tax office’s website.

Taxpayers have four years from the end of the affected tax year to claim their refund.

Adelle Greenwood, director of tax at the Institute of Chartered Accountants in England and Wales, said: “Given that more than 700,000 people missed out on tax refunds totaling £624 million last year, we would encourage all taxpayers to check whether they owe money to HMRC.”

He added: “Employees who have no other source of income may not have realized it was their personal responsibility to make a claim and are now being encouraged to do so.”

When a P800 is sent, it is up to the recipient to check that the tax code is correct and that all allowable employment expenses have been taken into account. These include, for example, uniform, tools, professional subscriptions and mileage.

The easiest way to claim the money back is to use the HMRC app or use the personal tax account on the website. Bank transfer and check options are available.

Online refunds are issued within five business days, while check refunds can take up to six weeks.

Last month, it was revealed that more than 170,000 people missed out on tax refunds for 2025/26 because they did not cash checks sent to them by HMRC.

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How do you know if you’re paying too much tax?

For most employees, tax is collected through the PAYE system; This means it is automatically deducted from wages or pensions. In most cases, employees in this program will not be required to file tax returns and calculations will be made on their behalf.

However, mistakes can still be made and this can lead to problems such as overpayment.

Refunds are often owed due to incorrect or outdated tax law or because the taxpayer was not allocated his or her full personal allowance for the year.

Other common reasons include the individual not working for the entire tax year or their job or working hours changing during the year.

For retirees, it is possible to receive a refund if the wrong amount of state pension was added to their tax bill.