Can I Claim Back Tax If I’ve Left My Job?

Introduction

Leaving a job can raise several financial questions, especially about your tax. Many people find they have paid more tax than necessary by the time they leave employment. The good news is that in most cases, you can claim a tax refund from HMRC if you have overpaid.

Whether you left mid-year, retired, or are taking time off before finding another role, this article explains how to check if you are due a refund, how to claim it, and what information you will need.

Why You Might Be Owed a Tax Refund

The UK’s Pay As You Earn (PAYE) system collects tax automatically from your wages each month. The amount deducted depends on your income and tax code. However, the system assumes you will work for the entire tax year (from 6 April to 5 April).

If you stop working partway through the year, your employer may have deducted too much tax based on that assumption. You might be owed a refund if:

• You stopped working and will not have another job in the same tax year

• You switched jobs and were temporarily on an emergency tax code

• You took a lower-paying job after leaving your previous one

• You started receiving benefits, a pension, or maternity pay after leaving

• You retired or left the UK to work abroad

Essentially, if your total income for the year ends up being less than expected when tax was calculated, you may be entitled to money back.

Step 1: Check Your Tax Documents

When you leave a job, your employer must give you a P45 form. This document shows:

• Your total earnings so far in the tax year

• The total tax you have paid

• Your tax code and National Insurance number

Your P45 is essential for claiming a refund because it confirms exactly how much tax you have already paid.

If you do not receive a P45, contact your employer’s payroll department. You cannot claim without it.

Step 2: Decide How to Claim

How you claim your refund depends on what you are doing after leaving your job.

If You Are Not Working Again This Tax Year

If you stop working and do not claim any taxable benefits, you can apply for a refund directly from HMRC using form P50.

You can do this online through your Personal Tax Account or by sending the paper form to HMRC. You will need to provide your P45 details, your bank information, and confirmation that you do not expect further income before the end of the tax year.

If You Have Started a New Job

If you move straight into a new role, your new employer will use your P45 to update your tax record. HMRC will automatically adjust your tax for the year and issue a refund through your payslip if you have overpaid.

This usually happens within a month or two of starting your new job, so you do not need to apply manually.

If You Are Claiming Benefits

If you claim Jobseeker’s Allowance (JSA) or other taxable benefits, your benefit payments are subject to tax. HMRC and the Department for Work and Pensions (DWP) will automatically review your tax position and refund any overpayment at the end of the tax year.

If you later stop claiming benefits, you can still apply using the P50 form to speed up the process.

If You Are Moving Abroad

If you are leaving the UK permanently or for a long period of work, you should complete form P85 instead of a P50. This tells HMRC about your departure and helps ensure you receive any tax refund due.

Step 3: Wait for Processing

HMRC normally processes refunds within four to six weeks, though it can take longer during busy periods. If your claim is successful, the refund is paid directly into your bank account or sent as a cheque.

You will also receive a confirmation letter explaining how the refund was calculated.

Step 4: Keep an Eye on Future Adjustments

If you start another job or receive other taxable income later in the same tax year, your refund might be adjusted. HMRC may recalculate your tax once your total annual earnings are known.

If you think something looks wrong, contact HMRC or check your details through your online Personal Tax Account.

Example Scenario

Imagine Tom leaves his job in August after earning £18,000 since April. His employer taxed him based on the assumption that he would earn around £36,000 for the full year. Since he does not plan to work again that tax year, Tom completes a P50 form online using his P45 details.

A few weeks later, HMRC calculates that he overpaid £700 in tax and transfers the refund directly to his bank account.

This example shows how PAYE adjusts based on expected annual income and why stopping work early can often lead to overpayment.

Common Mistakes to Avoid

• Forgetting to keep your P45: It is the key document for any tax refund claim.

• Applying for a refund too soon: Wait until you are sure you will not have further taxable income this year.

• Using unofficial websites: Always use the official HMRC website to apply for refunds.

• Ignoring your tax code: If it was wrong in your previous job, contact HMRC so it does not cause problems later.

What If You Overpaid Tax in Previous Years?

If you think you paid too much tax in earlier tax years, you can still claim a refund. HMRC allows claims for up to four years after the end of the tax year in question.

You will need to provide evidence such as P45 or P60 forms from that period. Refunds for older years are usually paid as a cheque.

The Role of an Accountant

If your income situation is complex, such as having multiple jobs, pension income, or overseas earnings, an accountant can help you:

• Review your tax position and identify overpayments

• Complete forms like P50 or P85 correctly

• Ensure your tax code is accurate for future employment

• Liaise with HMRC on your behalf

Professional advice helps ensure you receive the refund you are entitled to and remain compliant with HMRC rules.

Conclusion

Yes, you can claim back tax if you have left your job, especially if you stopped working before the end of the tax year or your earnings were lower than expected. The process is straightforward: use your P45, complete a P50 or P85 form where necessary, and wait for HMRC to process your claim.

Keeping your paperwork in order and checking your tax code regularly helps prevent future overpayments. If you are unsure about the process or have complex income, speaking to an accountant can make your refund claim faster and more accurate.