HMRC is handing UK households nearly £475, but the process is not automatic. It has emerged that almost one million people missed out on a £473 payout from HMRC in 2025.
One Million Missing Out
In 2025, nearly one million individuals failed to claim the money they were owed. In a post on social media platform X, formerly Twitter, HMRC stated: "Remember getting a letter about a tax refund but didn't do anything about it? Last year, almost one million people didn't claim back the money they're owed. Download the HMRC app to check."
How Tax Rebates Arise
Tax rebates occur when too much tax is paid through the PAYE (Pay As You Earn) system. Swift Refunds explains: "Quite often we find that HMRC has issued wrong PAYE codes to the employer, or the employer has simply operated an incorrect PAYE code themselves. The most common example is where a taxpayer has been placed on an emergency tax code, BR. This means that all of the salary would be taxed at 20% with no deductions for the Personal Allowance."
There are other irregularities in PAYE codes that can lead to repayment situations. The only way to find out is to review the PAYE codes in operation and check that deductions and allowances were correct for that employment.
Manual Action Required
Swift Refunds added: "There are many situations where tax repayments could arise. You will also note a pattern in that all areas require manual attention from the taxpayer. Tax relief does not come automatically."
If you believe you are due a tax refund, you should contact HMRC, who would be willing to help. Many allowances and reliefs can be applied with a quick phone call, but sometimes more complex situations may require a claim to be made in writing or may involve calculations. HMRC should always be able to advise you in most cases.
