Overview
- HMRC figures obtained by UHY Hacker Young show about 5.6 million people overpaid roughly £3.47–£3.5 billion in income tax in 2023–24.
- Tax specialists attribute most overpayments to incorrect or outdated PAYE codes driven by incomplete HMRC records and more complex personal finances.
- Common triggers include assumed company benefits that have ended, misread secondary income, confusion over multiple jobs, and late or inaccurate employer payroll data.
- HMRC places responsibility on individuals to ensure correct coding and points to its app and online accounts, while experts say many refunds may never be claimed due to patchy notifications and long contact delays.
- Advisers warn recent policy changes for 2025–26, including payroll recovery of some winter fuel payments for higher earners and collection of high‑income child benefit charges through PAYE, could increase coding errors.