One couple were able to max out their retirement contribution for the year without dipping into other savings thanks to a refund from HMRC.
Britons may be owed a tax refund for a range of reasons, such as overpaying tax via PAYE or the expenses incurred while working.
Experts have claimed “thousands of taxpayers” are unaware that not only can they claim a tax refund for the previous year, but that these can be retroactively applied for up to four years.
Steven Kibbel, financial advisor at Prop Firm App explained that several clients have been pleasantly surprised to receive emails alerting them to tax refunds of “hundreds of pounds waiting to be claimed”.
He said: “I’ve seen how seemingly small windfalls can provide valuable boosts on the path to wealth. During my years helping manage retirement accounts, I once assisted a client who discovered they were owed over £1,200 from overpaid taxes several years prior.
“That unexpected refund allowed them to max out their retirement contribution for the year without dipping into other savings.”
A legitimate message from HMRC will always come from an hmrc.gov.uk email address
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The latest data released by tax specialists, RIFT Tax Refunds, found that the typical tax rebate owed by HMRC in 2023 increased to £1,562, marking a 6.6 per cent rise from the year before.
Some people may be able to claim more than this due to being able to retroactively claim up to four years. The average refund over four years currently exceeds £3,000.
Britons may be due a tax refund from HMRC due to overpaying on their taxes due to changes in income, filing errors, or other factors such as one’s tax code.
Canada Life found that 31 per cent who had checked their tax code found that it was wrong at some point.
HMRC explains on its website: “In most cases, HMRC will automatically update your tax code when your income changes. They’ll usually get this information from your employer. If HMRC has the wrong information about your income, you may be given an incorrect tax code.
“To correct your tax code, make sure HMRC has up-to-date details about your income.” If someone believes their tax code is wrong, they can use the ‘check your Income Tax online’ service to update their employment details or tell HMRC about a change in income that may have affected your tax code.
When HMRC identifies these overpayments, they are obligated to issue refunds accordingly. The catch, however, is that refunds can’t be issued if HMRC doesn’t have one’s current contact information or if someone simply overlooks the notification.
Kibbel said: “That’s why it’s so important to keep your tax records up-to-date and be vigilant about checking emails, letters, and online accounts for any messages about pending refunds.
“As the saying goes, a penny saved is a penny earned! If you do have a refund waiting, actually claiming it is a relatively straightforward process. HMRC provides instructions on the next steps, which typically just involve confirming some information and providing recent payment details.
“Within a few weeks, that refund money could be back in your checking account, ready to contribute to your savings goals, pay down debts, or enjoy a little splurge.”
Although the outcome can boost one’s pockets by thousands, the financial advisor warned that Britons need to be vigilant as many scammers imitate HMRC to steal people’s money.
A legitimate message from HMRC will always come from an hmrc.gov.uk email address and use an individuals proper name.
Kibbel continued: “I really want to emphasise that HMRC will never, ever ask you to click links, download attachments, or hand over any personal or financial information just to initiate a refund payment. Their notification will simply state that you may be owed money and not try to immediately extract sensitive data from you.
“The same goes for any emails with urgent, threatening language about strict deadlines to claim your refund. The tax authorities will lay out the next steps clearly without resorting to high-pressure tactics like that. It’s a dead giveaway that something is fishy.
“If you have even a shred of doubt creeping in about an email’s authenticity, do not engage with it at all. Your best move is to directly contact HMRC through their website or official phone channels to verify if a legitimate refund is really available.
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The average refund over four years currently exceeds £3,000
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“I can’t stress enough how crucial it is to apply some common-sense skepticism here. Scammers are banking on people letting their guard down at the prospect of free money.
“But the second they start aggressively pushing for personal data just to supposedly access that refund, it should throw up a massive red flag. Err on the side of caution every single time.
“A tax refund from HMRC is your money to begin with. By taking a quick look into whether you have any refunds owed, you may just put some valuable pounds back in your pocket with minimal effort. So why wait? Check those emails and get your money back from the…
Read More: HMRC tax refund can help boost pension savings by over £3,000
2024-07-14 04:02:27