What are the most common mistakes people make when claiming a tax refund?

Alan Bermingham

10 Years of Expertise in Fintech Innovation

9 min read

What are the most common mistakes people make when claiming a tax refund details inaccurate income reporting, missing expense receipts, and delayed claim submissions regulated by His Majesty’s Revenue and Customs. UK taxpayers seeking tax rebates often make errors such as overestimating allowable expenses, submitting incorrect National Insurance or UTR numbers, and missing statutory filing deadlines. Common missteps include claiming for non-allowable personal expenses, failing to keep proper proof of purchase, or failing to declare all additional income sources. These errors can trigger HMRC compliance checks, leading to delayed refund processing or unexpected penalty charges. Utilising Open Banking tax applications like Pie simplifies tax refund claims by calculating accurate expense deductions, organising digital receipt records, and filing compliant Self Assessment returns directly to HMRC.

A Deep Dive into the Topic

Claiming a tax refund should be simple: you overpaid tax, so you get it back, right?

Unfortunately, many people make mistakes that delay their refund or even result in HMRC rejecting their claim. From incorrect details to missing deadlines, these small errors can cause big headaches.

In this guide, we’ll go through the most common tax refund mistakes, how to avoid them, and tips to make sure you get your money back as quickly as possible.

Ready? Let’s go!

What Is a Tax Refund?

A tax refund is basically HMRC giving you back money you shouldn’t have paid in the first place!

It happens when you’ve overpaid tax, maybe because of a wrong tax code, overpayments through Pay As You Earn (PAYE), or if your self-assessment payments on account were too high. Whatever the reason, if you’ve paid too much, you’re entitled to get that money back!

When you file your tax return, HMRC works out what you actually owe. If they find you’ve overpaid, they’ll issue a refund. But here’s the catch: it’s not always automatic. You might need to submit a claim to get your money back. And let’s be honest, dealing with HMRC’s processes can be a bit of a headache, so it’s always a good idea to stay on top of your tax records and make sure you’re getting what’s rightfully yours.

Think you’ve overpaid? Don’t wait around! Log into your HMRC Personal Tax Account, check your records, and claim back what you’re owed. After all, it’s your money!

Types of Tax Refunds – Which One Are You Owed?

Not all tax refunds are the same! Depending on your situation, you could be owed money for overpayments, self-assessment corrections, or tax relief claims. Here’s a quick breakdown:

Overpayment Refund – If you’ve paid too much tax, HMRC will refund the extra after processing your return. This often happens due to wrong tax codes, job changes, or income fluctuations.
Self-Assessment Refund – If your self-assessment tax return shows you’ve overpaid, HMRC will issue a refund. This is common for self-employed individuals or those with multiple income sources.
P800 Calculation Refund – Sometimes, HMRC spots an overpayment and sends a P800 tax calculation letter. If you get one, check it carefully: it could mean money back!
Tax Relief Refund – Expenses like pension contributions, charitable donations, or work-related costs may qualify for tax relief refunds. You can claim through self-assessment or HMRC’s online system.

Knowing these different refund types ensures you don’t miss out on money you’re owed, so if you think you’ve overpaid, check and claim it back!

Entering Incorrect Personal Details

A small mistake can lead to a big delay when claiming a tax refund! Something as simple as a typo in your National Insurance number, bank details, or address can send your refund on a detour, or worse, stop it from arriving at all.

If your address isn’t up to date, your refund cheque could end up at a house you haven’t lived in for years. Enter the wrong bank details? That refund won’t magically land in your account! Instead, you’ll be stuck chasing HMRC, filling out forms, and waiting even longer for your money. Reviewing your bank statements is also key to ensuring all details are accurate and up-to-date.

The fix is simple: double-check everything before submitting your claim. Make sure HMRC has your current details, especially if you’ve moved house or changed banks. Also, always check you’ve entered the correct unique taxpayer reference (UTR) to avoid pesky delays.

It only takes a minute, but it could save you weeks of hassle!

picture of a women working on a laptop with a cup of coffee

Using the Wrong Tax Code

Your tax code might just be a few letters and numbers, but if it’s wrong, it could mean you’re paying too much, or not enough, tax, leading to confusion about how much tax you should actually be paying. And let’s be honest, no one wants to overpay or get hit with an unexpected tax bill later!

A wrong tax code often happens when you change jobs, start getting multiple income sources, or move from full-time work to self-employment. If your tax code isn’t correct, HMRC might be taking too much tax from your salary. Or worse, not enough, meaning you could owe money later. To avoid this, always check your tax code on your P60, P45, or latest payslip.

Not sure if your tax code is right? Use HMRC’s tax code checker to make sure you’re on track. And if you need extra help, our free Pie Tax app makes tracking tax refunds easy, helping you get back what you’re owed without the stress!

Claiming Ineligible Allowable Expenses

Just because an expense is work-related doesn’t mean it qualifies for a tax refund, and that’s where a lot of people go wrong!

HMRC has strict rules on what you can and can’t claim, and getting it wrong could mean your claim gets delayed or rejected.

For example, you can claim for work uniforms, tools, and business mileage, but you can’t claim for your daily commute to work or regular clothing, even if you wear it for your job. Some people also try to claim food and travel costs that aren’t directly related to work, which is another common mistake that HMRC won’t accept.

Before submitting a claim, always check HMRC’s official list of allowable expenses to make sure you’re eligible. If you’re unsure, it’s better to double-check than risk delays or having your refund request denied!

Forgetting to Claim for Previous Tax Year

Did you know you can claim a tax refund for up to four previous tax years?

A lot of people don’t, and that means missing out on money they’re actually owed! If you recently realised you’ve overpaid tax, it’s not too late to get it back.

Many refunds aren’t automatically processed, so unless you check your tax records, you might never know if HMRC owes you money. This is especially common if you’ve changed jobs, been on the wrong tax code, or claimed work expenses but didn’t file for a refund.

To find out if you’re due a refund, log into your HMRC Personal Tax Account and check your past tax payments. If you’ve overpaid, you can still submit a claim, but don’t wait too long! Once the four-year deadline passes, that money is gone for good.

Missing the Claim Deadline

There’s nothing worse than realising you were owed a tax refund, but missed the deadline to claim it!

HMRC allows you to claim tax refunds for up to four years, but once that deadline passes, there’s no way to get your money back.

Many people forget to claim because they didn’t realise they overpaid tax in the first place. This often happens with wrong tax codes, job changes, or unclaimed work expenses. If you haven’t checked your tax history in a while, you could be missing out on money you’re entitled to.

To avoid losing out, mark important tax deadlines in your calendar and check your HMRC Personal Tax Account regularly. It only takes a few minutes to check, and if you’re owed a refund, it’s worth acting fast, because once the deadline is gone, so is your refund!

women reading paperwork sitting on a sofa

Not Keeping Proper Records

One of the biggest mistakes people make when claiming a tax refund is not keeping track of their documents.

If you can’t provide proof of what you’ve earned and what you’ve paid, HMRC may delay or deny your refund altogether. And we don’t want that!

Your payslips, P60s, P45s, and receipts are all essential when proving your claim. If HMRC needs additional details and you can’t provide them, your refund could be put on hold or even rejected. This is especially important for those claiming work-related expenses, overpaid tax, or self-assessment refunds.

To stay organised, keep digital or physical copies of your tax documents for at least four years. If keeping track of paperwork sounds like a hassle, our free Pie Tax app makes it easy to store records, track refunds, and ensure you never miss out on the money you’re owed. Sorted!

Filing the Self Assessment Tax Return Incorrectly

Filling out a tax refund claim should be simple, but using the wrong form or making small mistakes can lead to delays or rejections. Boo!

HMRC has different forms for different types of tax refunds, and using the wrong one can slow everything down.

For example, if you’re claiming a refund for work expenses, you need a P87, while refunds for tax deducted on savings interest require an R40. If you’re self-employed or claiming tax relief through self-assessment, you’ll need to include it in your tax return instead.

Not sure which form you need? HMRC provides a list of tax refund forms to help you pick the right one.

Another common mistake is forgetting to sign paper forms or submitting incomplete information. The easiest way to avoid these issues? Use HMRC’s online claim system, which guides you through the process and helps ensure your claim is correct, so you can get your money back faster!

Final Thoughts

Claiming a tax refund should be easy as pie, but simple mistakes can cause delays, rejections, or even lost refunds. Whether it’s entering the wrong tax code, using the wrong form, or missing the deadline, these errors can mean leaving your hard-earned money with HMRC instead of back in your pocket!

The good news? Avoiding these mistakes is simple: double-check your details, keep proper records, and file your claim correctly.

Why wait? Get started today and make sure you’re getting back every penny you’re owed!

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