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Claiming a tax refund when you stop work

Claiming a tax refund when you stop work

If you've just stopped working, you may be able to claim back some of the Income Tax you've paid. This could be because you've retired, returned to studying or because you've become unemployed.

This guide explains when an Income Tax refund might be due to you and how to claim a repayment if you've paid too much tax.

When a tax refund might be due

A tax year runs from 6 April to 5 April. If you stop working part way through a tax year, you might have paid too much tax for that year.

This can happen if you were paying tax through PAYE (Pay As You Earn) as an employee and:

you were only employed for part of the tax year - and didn't get any taxable state benefits for the rest of the tax year after you stopped working
you retired part way through the tax year
your employer was using the wrong tax code
you're a student and only worked in the holidays but didn't complete a form P38(S) Student Employees
you were made redundant and couldn't get another job

If you're self-employed, you have to make 'payments on account' of your next year's tax bill. If you've made payments on account of the tax due for the year when you stop working, you might have paid more than you have to.

Whether you were employed or self-employed before you stopped work, if you've paid too much tax you'll be able to claim a repayment of the amount that you've overpaid.

Check which state benefits are taxable and which aren't

How to claim a refund if you were employed

If you were employed before you stopped work, you'll have paid tax through PAYE. If you think you've paid too much tax through PAYE, the way to claim a repayment depends on your circumstances.

If you're claiming Jobseeker's Allowance or taxable Incapacity Benefit

If you're claiming Jobseeker's Allowance or taxable Incapacity Benefit, you won't be able to claim a tax refund straight away. This is because these benefits are taxable and affect any refund that you can claim.

You'll need to give form P45 Parts 2 and 3 to the Benefit Office to make sure that you get any tax refund you're entitled to - you keep Part 1A for your own records.

If you're getting Jobseeker's Allowance, the Benefit Office will pay any refunds you're entitled to after the end of the tax year. If you stop claiming Jobseeker's Allowance before the end of the tax year, the Benefit Office will pay any refund you're entitled to after you've stopped claiming.

If you get Incapacity Benefit, you'll get any refund you're entitled to after the end of the tax year.

If you get a new job within four weeks

If you start a new job within four weeks of finishing your old one, your new employer will pay any refund you're entitled to with your pay from your new job.

You'll need to give your new employer the P45 Parts 2 and 3 to make sure that you get any tax refund you're entitled to - you keep Part 1A for your own records.

If you're unemployed for at least four weeks or you retire or return to studies

If you think you've paid too much tax, you'll need to claim a tax repayment from us if any of the following applies:

you've been unemployed for at least four weeks
you stopped working because you've retired and you're not getting a pension from your old employer
you've returned to studying

You can claim a tax repayment by filling in form P50 Claiming tax back when you have stopped working. Send this to your Tax Office, together with form P45, Parts 2 and 3 - and keep Part 1A for your own records.

We'll send you any tax refund you're entitled to by post. We'll also send you a new form P45, Parts 1A, 2 and 3, if necessary.

If you retire and get a pension from your old employer, you'll get back any refund you're entitled to with your pension payments. You won't need to claim a tax repayment using form P50.

Go to form P50

Contact your Tax Office

How to get your refund if you were self-employed

If you have stopped being self-employed, you can claim a tax refund by completing the appropriate pages of your Self Assessment tax return.

We'll repay any tax that you've overpaid, together with any interest that you're entitled to.

You'll also need to give us details of how you want us to pay the refund. We can pay it:

to you
straight into your bank account
to your nominee - this might be your accountant
straight into your nominee's bank account
to a nominated charity

If you file your tax return online, the figures are worked out for you automatically. You'll find out straight away how much tax you'll get back.

Find out about completing your Self Assessment tax return online

Get the Self Assessment tax return SA100