Claiming your tax rebate after losing your job

Money Advice Service

Have you recently been dismissed or made redundant? If so, you might be able to claim back some of the tax you paid while you were working. This is known as getting a “tax refund”, or “tax rebate”. Read on to find out how to claim back tax.

How to claim tax back after redundancy or losing your job

Step 1 – Are you due a tax rebate?

You might be due a refund if you answer ‘yes’ to all of these questions:

  • Were you dismissed or made redundant part way through the tax year? Tax years start on 6 April and end on the following 5 April.
  • Were you employed and paying tax through PAYE (Pay As You Earn)?
  • Are you still out of work?

How much you can get back will depend on:

  • How much you earned since the tax year started
  • How much tax you paid on those earnings and any other income

Step 2 – Check how much tax you’re owed

There’s a simple tax checker tool on the HM Revenue & Customs (HMRC) website.

It should only take a few minutes to find out roughly how much money you can claim.

Before using the tax checker, you’ll need to hunt down some paperwork such as payslips and bank statements, but that’s all explained on their website.

Step 3 – Claim your tax back

How you go about getting your refund will depend on:

  • How long you’ve been unemployed
  • Whether you’ve claimed any taxable benefits since losing your job
  • Whether you found another job within four weeks of losing your old one

If you’re claiming Jobseeker’s Allowance or other taxable benefits

If you’ve claimed any taxable benefits since losing your job, the Benefit Office has to pay your refund.

This is because the tax you’re paying on your benefits affects how much you owe overall.

Taxable benefits include Jobseeker’s Allowance and Carer’s Allowance.

You’ll need to send the Benefit Office parts 2 and 3 of your P45 to claim your tax refund. Keep part 1A for your records.

They’ll work out your refund and pay it either after the end of the tax year or after you stop claiming taxable benefits, whichever comes first.

If you’re claiming Universal Credit, this is not a taxable benefit, so once you’ve been unemployed for four weeks you can claim your tax refund from HMRC.

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 tax refund you’re owed.

Just give them parts 2 and 3 of your P45, keeping part 1A for your records. You’ll get your refund with your pay.

Give parts 2 and 3 of your P45 to your new employer to claim your tax refund.

If you’ve been unemployed for at least four weeks

  • You can claim a tax refund by filling in form P50. Send this to HMRC with parts 2 and 3 of your P45.
  • Contact HMRC (0300 200 3300) before filling in the form and they will tell you what other information you need to provide.
  • Download form P50 from GOV.UK.

You should get your refund in the post within the tax year.

Tax on your redundancy money

Your redundancy pay is tax free up to £30,000.

But if your redundancy money includes holiday pay or pay in lieu of notice then you’ll have to pay tax on it as you would on your normal pay.

Never assume your employer has got the calculations right.

The tax deducted could be too much or too little and it’s up to you to notify HMRC.

Need more info?

This article is provided by the Money Advice Service.

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