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A4.216 Repayment process

Where the relief or deduction claimed requires the repayment of tax paid under an income tax or corporation tax self-assessment, the claim will be made in the tax return. Most such repayments are processed automatically along with any interest or repayment supplements. Detailed calculations of interest and repayment supplement are not normally issued, but are supplied on request.

HMRC does not have to repay overpaid tax and has the right to set-off any repayment of tax against the taxpayer's outstanding tax debts, even if the right to receive the tax repayment has been assigned to a third party¹.

If a free-standing claim or election (see A4.202) results in a tax repayment, it is advisable to follow the guidance on HMRC's website in order to have the overpaid tax refunded. Where the repayment arises because excess tax has been deducted from savings and investment interest, the repayment claim should be made on form R40.

Employees and pensioners may be entitled to in-year PAYE coding adjustments