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Self-employed tax refund: how to get one if you’ve overpaid tax

3-minute read

Business owner looking at tax records on tablet
Conor Shilling

Conor Shilling

6 December 2023

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Think you’ve paid too much tax? You could be entitled to a self-employed tax refund just like regular employees – but the process for claiming the money back can be different if you run your own business.

If you’ve made a mistake on your tax return, or if you think you’ve overpaid, read our guide on how to claim a self-employed tax refund.

What is an HMRC tax refund?

If you’ve paid too much tax, you could be eligible for a refund from HMRC. This is known as a tax rebate.

The average tax rebate in the UK is around £3,000 and approximately £300 million in tax refunds is unclaimed each year, according to tax specialists RIFT.

Getting a self-employed tax refund can be more difficult for people who aren’t paid through PAYE.

The self-employed need to tell HMRC how much they think they’re due and provide information that proves they’ve overpaid their tax bill.

Tax refund vs tax rebate: what’s the difference?

A tax refund and a tax rebate are the same thing – HMRC uses the terms interchangeably.

In some cases, HMRC will work out that you’re owed a tax refund and send you a P800 tax form to let you know.

However, it can be difficult for HMRC to know you’ve overpaid, particularly if your claim is due to expenses. That’s why it’s so important to keep good records and contact HMRC immediately if you think you’ve paid too much tax.

Are self-employed people eligible for tax refunds?

Self-employed people can claim tax refunds if they’ve paid too much tax. For example, if you make a mistake on your tax return, you may be entitled to some money back.

However, HMRC deals with tax refunds for Self Assessment taxpayers differently.

How to get a tax refund as a self-employed person

Self Assessment taxpayers claim tax refunds through the Self Assessment process. This means that any overpayments will be dealt with once HMRC has received your next tax return.

When completing your return, you should be told that you’ve overpaid. You can then choose how you'd like the money to be paid back to you – for example, by bank transfer. Alternatively, you can put it towards your next tax bill.

Sometimes, however, the opposite may be the case – you may have been paid too much, for example in tax credits, and will be required to make a repayment to HMRC.

If you've received a tax credit overpayment but are also entitled to a separate refund, HMRC will deduct the amount you owe from the amount to be repaid to you.

Self Assessment mistakes: how to claim a tax refund

It’s not uncommon for self-employed people to make mistakes on their Self Assessment tax return, which results in them paying too much tax.

If this applies to you, the first step is to correct the relevant tax return. You can do this through the government’s Self Assessment portal – the same place that you completed your return in the first place.

To make a correction to your tax return:

  1. Log into your HMRC account
  2. Navigate to your Self Assessment account
  3. Click on 'More Self Assessment details'
  4. Click 'At a glance'
  5. Select 'Tax return options'
  6. Choose the tax year you want to amend
  7. Make the amendment directly in the tax return form

Remember – you may have to provide supporting evidence if you want to correct a tax return. As always, it’s important that you keep full and accurate records of your business finances.

Read our guide on how to amend a tax return for more information.

Am I due a tax rebate?

If you make a mistake on your Self Assessment, you could end up overpaying your tax bill.

For example if you accidentally input an expense as £100 instead of £1,000, your overall allowable expenses will be lower.

As a result you’ll pay tax on more of your taxable profit, which means you’ll have paid more than you owe.

Tax rebate calculator

If you think you’ve overpaid your tax bill, you can use RIFT’s tax rebate calculator to work out how much you could be owed.

Once you have an estimate, you can follow the steps above to amend your tax return.

How to claim a tax refund

You can also use the government website to claim a self-employed tax refund. Sign in to your Self Assessment or personal tax account to check if you’re due a refund.

  • if you have a Self Assessment account, you’ll need to select ‘Request a Repayment’
  • if you have a personal tax account, you’ll need to select ‘Claim a tax refund’

You won’t need to claim again if you’ve already applied for a refund in your tax return.

Is there a time limit for correcting a Self Assessment tax return?

Normally, tax returns can only be corrected up to 12 months after the Self Assessment deadline for the relevant tax year. So, if you made a mistake on your 2022-23 tax return, you would normally only be able to amend it up to 31 January 2025.

However, there are some circumstances when you may still be able to claim your tax refund even after this deadline has passed.

HMRC has a scheme called ‘overpayment relief’ for these situations. However, the process for claiming a refund through overpayment relief is different – you’ll need to contact HMRC directly and explain the mistake and how it was made.

To do this, you'll need to write to HMRC using the contact details on your most recent letter from them. You should explain the mistake, and make sure you provide supporting evidence to back up your claim (for example P45s if you moved from employment to self-employment).

Finally, make sure you get proof of postage from the Post Office when you send your letter.

Tax refund for the self-employed: how long does it take?

If you’re owed a tax rebate you’ll normally get paid within two weeks, according to HMRC. However, some tax specialists suggest it can take up to 12 weeks.

If you’ve made an online claim for a tax rebate, HMRC says you should wait four weeks before contacting them about your payment.

Do you have any unanswered questions about how to get a tax rebate? Let us know in the comments below.

Useful guides for the self-employed

Looking for self-employed insurance?

With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it's public liability insurance, professional indemnity or whatever else you need, we'll run you a quick quote online, and let you decide if we're a good fit.

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Conor Shilling

Written by

Conor Shilling

Conor Shilling is a Copywriter at Simply Business with over two years’ experience in the insurance industry. A trained journalist, Conor has worked as a professional writer for 10 years. His previous experience includes writing for several leading online property trade publications. Conor specialises in the buy-to-let market, landlords, and small business finance.

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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