HMRC Guidance – How to claim a tax refund on your pension payments

This month, HMRC has responded to a question on how best to claim a tax refund if you cease to work during a tax year – ie before 5th April. If you only work for a part-year, it may well be the case that you have overpaid tax as a result.

If you stop working part way through the tax year, you may have paid too much tax through PAYE. This is particularly common when someone retires mid-year, which can also be a good opportunity to review your retirement position, including checking your state pension forecast.

Claiming a tax refund after retiring during the tax year

If your future income will be from a private pension and lower than previously, then HMRC have offered this advice “Once you retire and you’ve got your P45, you can contact the helpline and we can take the details over the phone.”

“We’ll use the P45 info and instruct your pension provider to refund any overpaid tax through your pension payments.”

How HMRC refunds overpaid tax through the P800 process

If you are not within Self Assessment and HMRC calculate that you have overpaid tax they will issue a form P800.  They can issue this repayment calculation up to four years after the end of the relevant tax year.  So if you overpaid tax in the year ended 5 April 2025 the latest the P800 could be issued would be 5 April 2029, although you could receive sooner.  Always check the form P800 to check it is correct.

Other situations where you may need to claim a tax refund yourself

Alternatively – if you do not want to wait – or believe that you have overpaid tax for a different reason, for example:

• Pay from a job
• Expenses as an employee
• receiving a lumpsum pension or redundancy payment
• UK income if you live abroad
• Tax paid on interest received
• UK income earned before leaving the UK

Then you can use HMRC’s tool to check the best way to apply.

As you would expect the correct timing and method of claim is important, so if you require assistance in claiming a repayment of overpaid tax and/or National Insurance then contact Gravita.