How to get a self-employed tax rebate

What is an HMRC tax rebate?

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 tax rebate can be more difficult for self-employed 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.

Are self-employed people eligible for tax refunds?

Self-employed people can claim tax refunds just like regular employees. If you’ve paid too much tax, for example, because you made 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 rebate 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.

How to claim a tax rebate if you’ve made a mistake on Self Assessment

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.

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.

You can also use the government website to claim a tax rebate. 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 2021-22 tax return, you would normally only be able to amend it up to 31 January 2024.

However, there are some circumstances when you may still be able to claim your 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.

How long does a tax rebate 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.

Useful guides for the self-employed

• How to do a self-employed tax return
• What is tax relief? A guide to small business tax relief
• Dodgy email from HMRC? Here's how to avoid falling for a scam
• Why do I need business insurance?

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