How to Claim a Self Assessment Tax Refund

Common reasons for a refund

CIS deductions taken at 20% or 30% that exceed your final bill, payments on account that were too high, pension contributions and Gift Aid relief, or expenses not claimed under PAYE can all create a rebate.

How to claim

File your return, check the calculation, and choose how you want repaying. You can also request repayment of an overpayment from your HMRC online account.

How long it takes

HMRC typically pays within about 4 weeks of finishing processing, though checks can take longer. Make sure your bank details are correct.

Time limits

You can usually claim an overpayment within 4 years of the end of the tax year, so it is worth reviewing older years.

When does a Self Assessment refund arise?

A refund simply means that the tax and National Insurance you have already paid for a tax year is more than your final liability once the return is processed. The tax year runs from 6 April to 5 April, and the return calculates what you owe for that whole period. Anything paid in advance, deducted at source or paid on account is then set against that figure. If the credits are larger than the bill, the difference is an overpayment that HMRC should repay.

The most common situations are:

• CIS deductions. Contractors deduct 20% (registered) or 30% (unregistered) from payments to subcontractors. Those deductions are treated as advance payments of your tax, and they often exceed the final bill once expenses and your Personal Allowance are taken into account.
• Payments on account that were too high. Payments on account are based on the previous year’s bill. If your profits fall, the two instalments can add up to more than the tax actually due.
• Tax paid through PAYE. If you have a job and some self-employment, or you stopped work part-way through the year, your tax code may have collected too much.
• Reliefs claimed through the return. Pension contributions, Gift Aid donations and unclaimed expenses can reduce the bill below what was collected.

Worked example: a CIS subcontractor with a refund

This is an illustrative example, not a real client. A subcontractor registered with CIS is paid £30,000 for labour across the tax year, and contractors deduct 20%, so £6,000 has been taken at source. Allowable expenses (tools, insurance, van costs) come to £4,000. Here is the calculation, assuming England and a single source of income:

Because no compulsory Class 2 charge applies any more, and profits of £26,000 are above the Small Profits Threshold of £6,845, the contributions record is protected without a separate payment. If you want more detail on this route, read our guide to reclaiming a CIS tax refund.

How to claim, step by step

1. Gather your records for the year: income, expenses, CIS statements, P60s and details of any pension or Gift Aid payments.
2. Complete the return and check the tax calculation, sometimes called the SA302. Our explanation of what an SA302 shows helps you read it.
3. Choose how you want to be repaid. You can ask for a bank transfer, or you can leave the credit to reduce your next bill, which may suit you if payments on account are coming up.
4. Submit the return online. HMRC then processes it and issues the repayment, which usually takes a few weeks but can be longer if it runs a compliance check.
5. If the figures turn out to be wrong, you can correct them. See how to amend a Self Assessment return for the time limits.

Refunds linked to payments on account

Suppose last year’s tax bill was £4,000. HMRC will ask for two payments on account of £2,000 each, due on 31 January and 31 July. If this year’s final bill turns out to be £2,600, you will have paid £4,000 in advance, leaving an overpayment of £1,400 (£4,000 less £2,600). You can claim that back or ask for it to be set against your next bill.

If you know profits are falling, you can apply to reduce the payments on account before they are due, as long as you do so honestly and on a reasonable estimate. Claiming a reduction that turns out too low can lead to interest, so only do it where you have good reason. Read how payments on account work and how to reduce them for the detail.

Common mistakes when claiming a refund

• Forgetting to enter CIS deductions from every contractor, so the credit is understated.
• Giving incorrect bank details, which delays payment.
• Assuming HMRC will repay automatically without a filed return where one is required.
• Missing the time limit, which is generally four years from the end of the tax year.
• Reducing payments on account too aggressively, then facing a bill and interest.
• Ignoring HMRC letters that ask for evidence before releasing the repayment.

Refund checklist

• All CIS statements and PAYE figures collected.
• Expenses and reliefs reviewed and supported by records.
• Calculation checked before you submit.
• Repayment method and bank details confirmed.
• Older years reviewed if they fall within the time limit.

If you would rather not work through this yourself, Self Assessment Tax Return Accountants (SATR) prepares and files returns online for a fixed fee from £199 + VAT, using qualified UK accountants who check that every credit and relief is picked up. You can start on our online order page or see our CIS contractor service.

This article is general information, not personal tax advice.

Frequently asked questions

Will HMRC pay interest on my refund?

HMRC pays interest on some repayments from the date of overpayment, at a lower rate than it charges on debts.

Do I need an accountant to claim?

Not required, but an accountant helps make sure every relief is claimed.

How is a refund different from a credit against my next bill?

A refund is repaid to your bank account. A credit stays on your HMRC record and reduces what you owe next time, for example against a payment on account. You normally choose which you prefer when you file or when you ask HMRC to repay it.

Can I claim a refund for earlier years?

Generally yes, within four years of the end of the relevant tax year, although check current HMRC guidance for your circumstances. Reviewing earlier years is worthwhile if you had CIS deductions or changing income.

Why has my refund not arrived?

Common reasons are an unprocessed return, incorrect bank details, an HMRC check on the figures, or the credit being held against another debt. Check your online tax account first, then contact HMRC if it is well beyond the usual few weeks.

The Bottom Line

A Self Assessment refund simply means you paid more than you owed — most often through CIS deductions at 20% or 30%, payments on account set from a better year, or tax already collected under PAYE. File the return, check the SA302 calculation, choose a bank transfer or leave the credit against your next bill, and remember the four-year limit for older years. Get the figures right first time and HMRC usually repays within a few weeks.

Prefer a specialist to handle it? Our fixed-fee Self Assessment service starts from £199 + VAT — prepared and filed online by qualified UK accountants. Order online now or see our CIS contractor tax returns service.