Are You Sure You Are Not Due A Tax Return? How Much Do You Know About Your UK Tax Rights? - By: Felicity Lightbody

So many people in the United Kingdom are entitled to a tax refund and are not even aware of it. As many as one in three people who work and use PAYE which stands for Pay As You Earn are in fact doing themselves out of a tax return by not knowing their rights. Assuming you have paid all the tax you need to for the year as you earn you wage is easy but it could be you who is missing out on money the Tax man owes you, it may not be into the thousand but is has been calculated that up to one third of people on the PAYE scheme are owed somewhere between 750 and 1,250 pounds. In this economic climate every penny counts and that could be a holiday, new washing machine or repair to your car paid for.

The average person on the PAYE is not even aware this money could be owed to them because they are putting all their trust into their payslip but not all payslips are completely accurate and there are always difficulties with such a large system with so much information to process and sort. The PAYE system does rely solely upon the information it receives and therefore the old adage is true, if you put garbage in, garbage will come out.
The PAYE system does work extremely well considering the sheer volume of people using it and for most average employees they will never encounter a serious problem, but for those who have notice a discrepancy or two perhaps looking more closely at the facts and figure would lead to a substantial return of overpaid tax. It is an unfortunate part of this system that when the figures don't add up it can take a while to be recalculated and in most cases these small discrepancies, when unchallenged will continue and although getting a correction made can take time you may find it is worth it.

Something as simple as your tax code should be looked at this gives you the information about at what level your tax is being calculated which translated means how much are you actually paying in tax. You as the employee assume this code is correct without even looking into what this code means in terms of your contribution, you also assume your employer is giving the PAYE system the correct information about you and has applied the correct code for your Tax calculation. In an example of working a full year with the same employer on the incorrect Tax code you could be owed a considerable amount of Tax rebate.

This Tax code system is not flawless and mistakes can happen with your Tax and you could have been overpaying especially if you have never been converted from your emergency Tax code, this code gives you a restricted personal allowance within the tax year and will potentially pay more Tax. Another code you may have been put on is the OT code which gives you no allowances at all for this Tax year and your income would be taxed at a basic rate which again means paying more Tax than you may actually need to.

If you have ever left the UK part of the way through the Tax year then you would have been given only part of your allowance for the whole year so you may be owed a Tax rebate. Especially if you have lived or worked abroad for a time then in the Tax year you left you may be owed a rebate for not reaching your personal limit on earnings for that year and then if you have returned and been on emergency Tax for a while they may owe you more for this period too. There may even be a Tax returned owed in the other country you worked in too depending on your personal situation.

The significant point is to check your codes and enquire if you have ever been working abroad that these situations haven't been overlooked by the PAYE system as it can mean losing a serious amount of money.

About the Author

Felicity is a part-time scribe, writing occassional pieces in the UK. If you think you are due a tax refund but don't know where to start, then try our CIS tax returns service. For fast tax returns and more information please visit the Tax Returns Direct website.

Article Directory Source: http://www.articlerich.com/profile/Felicity-Lightbody/39388

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