Sun 24 Apr, 2016 10:01 am
Just wondered if anyone knows how a tax rebate works? I know we all have to pay tax but, in a previous job I randomly received a cheque in the mail from HMRC do you just get them randomly or is it because there was a problem with how much tax you paid? Thanks
HMRC don't send random gifts out. If they send you a refund it's because they have worked out you have paid too much tax in one or more tax years. While you are working they give you a tax code based on your salary and tax you on the amount of that which is over your personal allowance. They assume you will work the whole tax year, so if you stop working part way through the tax year you may have paid too much tax. Or the employer might have been using the wrong tax code.