Many business professionals, from sole traders conducting contracted work to those who run small to medium-sized enterprises (SMEs), are unaware that when they pay tax here in the United Kingdom via P.A.Y.E., they are often eligible to receive a tax refund.
Refunds can be claimed for a wide range of reasons that can sometimes amount to a significant sum. This reclaimed tax can then be reinvested into an enterprise, helping people grow their business or furthering their professional career.
Given the fact that many people are unaware of their entitlement to a tax refund it’s understood that by the time they are ready to claim money owed to them, several years may have passed. As a result, a commonly asked question by UK claimants is how far back exactly are they able to claim a tax refund.
In the next sections, we’ll take a closer look at tax refunds. Along with answering how far back claims can be made, we’ll also look at an effective method of ensuring you receive your refund.
A tax refund is defined as a refund received by a person on taxes when a tax liability amounts to less than any taxes paid. Put simply, this means that if an individual has overpaid tax to Her Majesty’s Revenue and Customs, they can then claim it back.
You can currently claim back UK tax for up to four previous tax years. While you used to be able to reclaim overpaid tax for longer, since the UK government altered the legislation, it now only possible to claim for the past four years. However, the good news is that as most people aren’t required to make a statutory return, there are no penalties for late lodgement.
There are multiple scenarios that can lead people to be owed a tax refund. For instance, if someone have been put on a code for emergency tax, or if they drive a vehicle of their own vehicle to other locations as part of their employment, for example like a care worker or estate agent.
Taxpayers can also claim back for travel on public transport when they travel between locations, or for other work-related expenses, like laundering a uniform, buying a computer and using their personal phone for work calls, among many others. Additionally, expenses incurred while performing a role remotely from home due to the coronavirus pandemic can also be claimed back.
If you are looking for expert advice and help with a tax refund, you can contact Adaptive Accountancy. We currently provide a no win, no fee service through our sister site Tax Refund Wizard. The process is hassle free and simply involves filling out an online form, and after this, we will work out the best way to maximise the size of the tax refund you receive.