- Hundreds of thousands of households are overpaying on their tax, with around 730,000 refunds going unclaimed last year, according to HMRC data.
- The average unclaimed refund was £855, totalling an estimated £624 million that taxpayers failed to retrieve.
- Taxpayers typically receive a P800 tax calculation letter detailing their refund, but these are not always automatically paid out and require action from the recipient.
- Reasons for overpayment include incorrect or outdated tax codes, not working a full tax year, changing jobs, or incorrect state pension amounts in tax codes.
- Individuals can claim their refund via the HMRC app or their personal tax account online, with a four-year window from the end of the affected tax year to do so.
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