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 it.

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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 or part of the tax year
  • you were made redundant and couldn't get another job
  • you received payments after leaving such as arrears of pay, payments in lieu of notice, unpaid holiday pay, redundancy or termination payments including compensation for loss of office or employment

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 refund of the amount that you've overpaid.

Check which state benefits are taxable and which aren't

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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, taxable Employment and Support Allowance or taxable Incapacity Benefit

If you're claiming Jobseeker's Allowance, taxable Employment and Support Allowance or taxable Incapacity Benefit, you won't normally 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 normally pay any refund 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're getting Incapacity Benefit or Employment and Support Allowance, you'll get any refund you're entitled to after the end of the tax year or after you've stopped claiming.

However, if you were made redundant HM Revenue & Customs (HMRC) may be able to pay you a tax refund during the tax year. You should contact HMRC and they will tell you what information to provide and what forms you need to complete.

Contact HMRC

Note that if you've been put on a 'week 1' or 'month 1' 'emergency' tax code, HMRC will pay any refund that is due – follow the link below to find out about emergency tax codes and why you might be on one.

Emergency tax codes

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 received payments after leaving your last job such as arrears of pay, payments in lieu of notice, unpaid holiday pay, redundancy pay or any other termination payments and you think you have paid too much tax, you should contact HMRC. They will tell you what information to provide and if there are any forms you need to complete.

Contact HMRC

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 refund from HMRC 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 refund by filling in form P50 Claiming tax back when you have stopped working. Send this to HMRC, together with form P45, Parts 2 and 3 - and keep Part 1A for your own records.

HMRC will send you any tax refund you're entitled to by post. They'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 refund using form P50.

If you were made redundant contact HMRC before filling in form P50 and they will tell you what other information you need to provide.

Go to form P50

Contact HMRC

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How to claim a 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.

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

You'll also need to give HMRC details of how you want them to pay the refund. HMRC 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

Since 6 April 2012 you can no longer make repayments to charity for any year. Any repayment requested to go to charity will be sent to you.

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

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More useful links

Tax when leaving the UK

Tax when starting, leaving or retiring from work

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