UK tax refunds and doing your UK tax return for working holiday makers - FAQs
- Should I do a UK tax return?
- I am self-employed or I have a limited company — do I have to do a tax return?
- How do I know if I am paying emergency tax?
- I think I have paid too much tax — what should I do?
- What are the advantages/disadvantages of using a tax agent?
- When can I apply for a UK tax refund?
“I realised I was paying more tax than my colleagues so I assumed I would be due a refund. I sent my documents to Inland Revenue and about three months later, I got back £420” - Alex, from Newcastle, Australia, currently living in London.
Should I do a tax return?
Most employees in the UK do not get a tax return to fill in and have their income tax deducted by their employers through the PAYE system. The system reduces unnecessary work if you paid the correct amount of tax. However for many, if you are entitled to a return — you lose if you do nothing. Just understanding the basics of how the taxation system works or using an online calculator like the one on this page can result in a significant return. The DIY option also exists for getting a refund or you can use an accountant or tax agent to assist you. Read on learn more:
Get your UK Tax Refund started online by using 1st Contact. They provide a free no obligation assessment and if there is no refund, you dont pay a fee.
Case study 1: You arrived in the UK in December and you secure a contract with an agency for one month in January. You organise your National Insurance (NI) number and then start the contract, getting paid £300 per week, earning a total of £1,200, which is taxed at the normal rate since you have your NI number. You then go travelling for three months over February, March and April returning to the UK to work again in May (which is the new tax year). Since your income is below the threshold of £6475 for the 09/10 tax year, you can claim back all the tax you have paid.
Case study 2: You arrive in the UK and immediately find yourself a full-time job. Your first pay packet comes before you have had the chance to sort out your National Insurance (NI) number, and you are therefore charged at the "emergency" tax rate. You will be eligible to claim back all the extra amounts you have paid at the end of the tax year on 5 April.
Get your UK Tax Refund sorted out using 1st Contact. They provide a free no obligation assessment and if there is no refund, you dont pay a fee.
If any of these apply to you, you may be due a tax refund:
- If you have earned less that £6475 in the 2009/10 tax year (Approx £125 per week or £540 per month) you may be due a tax refund. (£5435 in the 08/09 tax year)
- Worked for only part of the tax year (Tax year starts 5 April)
- Were paying emergency tax and NI contributions at any stage (Example: If you started working before your NI Number was set up, you were likely paying emergency tax)
- If you have worked for more than one employer at any one time, you may be entitled to a tax refund.
The tax year begins on 5th April. Use the calculator below to see if you could be entitled to a refund.
I am self-employed or I have a limited company — do I have to do a tax return?
If you are self-employed or working as a contractor, you will also have to do a tax return. See information on limited companies. If you are self-employed and not working through a limited company, you should have registered as Self Employed with the HMRC and you will have to complete a Self-Assessment tax return. See the HMRC website for more information about registering as self-employed.
How do I know if I am paying emergency tax?
If you have not supplied your employer with your National Insurance (NI) number, you will be paying emergency tax rates. Talk to the HR or Payroll department of the company or agency you are working for, or look at your payslips if you are unsure. If you are paying emergency tax your payslip should display the emergency tax code which is 522L.
You can also do the math yourself. Check out the percentages of tax you should be paying — How much tax do I need to pay in the UK?
I think I have paid too much tax — what should I do?
You need to make sure you have kept all the documents required to show how much tax you have paid. Make sure you keep the following:
- P45 a form containing details about your pay and tax, given to you if you leave you job during a tax year.
- P60 a form containing details about your pay and tax that your employer should give you by 31 May after the end of the tax year (if you were in your job at 5 April).
You then need to decide if you want to claim your tax yourself or use a traveller or tax-service company to manage the refund for you. If you choose to do your refund yourself, you need to complete a tax return and submit your original P45/P60 to Inland Revenue. A tax return form can be obtained from your tax office or from the HMRC website.
Generally if you do your tax return yourself, it will take two to three months to get your money back.
For a good alternative to a DIY tax return, Claim your Tax Refund through 1st Contact. They offer competitive fees and you can get refunds for multiple years. They also provide a free no obligation assessment and if there is no refund, you don't pay a fee.
What are the advantages/disadvantages of using a tax agent?
Many tax agents and traveller companies offer tax rebate services especially for working holidaymakers. There are dozens of companies around, especially in London, so if you decide to use an agent then you should definitely shop around. If you use a tax agent, the process of getting your refund should be simpler for you and you are likely to get your money quicker. Some agencies will charge you a flat fee for their services, some will take a percentage of your rebate and some will have a "No rebate, No fee" policy.
When can I apply for a UK tax refund?
You can apply for a tax refund at the end of the financial year (5 April) or if you are definitely not going to be working in the UK for the rest of the financial year, or you are leaving the UK to return home, then you can apply at any time. If you are leaving the UK, you need to fill in a P85 form.
You can claim back tax refunds as far as six years.