730,000 UK households urged to claim £855 each from HMRC | Personal Finance | Finance
UK households could be owed £855 each on average say financial experts who are urging them to check the code printed on their payslip.
More than 730,000 UK households failed to claim PAYE refunds on their earnings last year, according to The Investors Centre.
The unclaimed refunds were worth around £624million in total, according to ICAEW, which said the figures were based on HMRC data. The warning is particularly timely now because the 2025/26 tax year has ended, the 2026/27 tax year is underway, and many workers and pensioners will soon be checking payslips, tax codes and HMRC letters to see whether they paid the right amount last year.
PAYE usually takes income tax automatically from wages and pensions, but that does not mean it is always right. People can overpay after changing jobs, being put on an emergency tax code, retiring, starting pension withdrawals, working part of a tax year, or having more than one source of income.
Thomas Drury, money-saving expert at The Investors Centre, says the biggest danger is assuming that a refund will always arrive automatically.
He said: “People hear the word PAYE and assume everything is handled for them. But PAYE is only as accurate as the information behind it. If your tax code was wrong, your job changed, your pension income changed, or HMRC did not have the full picture at the right time, you may have paid more tax than you needed to.
“The worrying part is that many people do not realise they have to take action. A refund can be due, but if you ignore the letter or do not check your account, that money can sit unclaimed.”
HMRC may send a P800 tax calculation letter if someone has paid too much or too little tax. GOV.UK says the letter tells people how to get a refund if they are due one. If the letter says they can claim online, they can claim through the online bank transfer service, their personal tax account, the HMRC app, or by contacting HMRC.
Drury says this is where people often lose momentum: “A P800 is not something to throw in a drawer. It is a calculation of whether you paid the right amount of tax. If it says you are due a refund, you need to read exactly what it tells you to do. Some people assume HMRC will just send the money automatically, but that is not always the case. If the letter says you need to claim, you need to claim.”
There is also a time limit. ICAEW says taxpayers only have four years from the tax year in which PAYE was paid to claim a refund.
“That deadline matters. This is not money you should leave until later. If you are owed a refund, it is your money, and there is no reason to let it sit there unclaimed.”
