Employees and pensioners are being encouraged to check whether they are due a PAYE tax refund after HMRC figures suggested that more than 730,000 refunds went unclaimed last year. HMRC said the average unclaimed refund was worth £855.
A refund can arise for several reasons, even where there has been no payroll error. Common causes include an incorrect or outdated tax code, not receiving the full personal allowance, working for only part of the tax year, changing jobs or hours during the year, or having the wrong amount of state pension included in a tax code.
For most PAYE taxpayers, HMRC no longer issues refunds automatically by cheque. Instead, people who receive a P800 tax calculation letter are usually expected to review the calculation and make a claim themselves if they agree the figures are correct.
Refunds can usually be claimed through the HMRC app, an online bank transfer service, a personal tax account or by requesting a cheque. HMRC says online claims are normally paid within five working days, while cheque payments can take up to six weeks.
Employers cannot claim P800 refunds on behalf of employees. However, HMRC has used its February 2026 Employer Bulletin to encourage employers to remind staff to check whether they may be due money back.
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