Tax Refund and Covid-19 FAQ
02nd June 2020
This is a difficult and worrying time for a lot of people. With many people on reduced pay or worried about finances in general, it’s critical to make sure you’re getting back everything you’re owed from HMRC - and with the average first tax refund coming in at around £2,500 it's not something you want to miss out on.
Here are the top questions we’re hearing from RIFT customers right now.
Can I claim a tax refund while I’m on furlough?
Yes, absolutely. The fact that you’re now on furlough doesn’t disqualify you for a single penny of the refunds you’re already owed. The money you’re claiming back now comes from the work related travel and expenses you had in the previous tax year. If you haven’t made a claim in a while, you could still be owed tax refunds dating back as far as 4 tax years. Nothing about the current situation should keep you from getting back what’s yours from those years.
Can I claim a refund if I was made redundant or lost my job due to Covid-19?
Yes! Losing a job-part way through a tax year doesn’t prevent you from claiming back what you’re owed. Also, when you pay your tax through PAYE your payments are calculated on the assumption that you’ll be earning steadily throughout the year. When your income suddenly drops because of redundancy, the payments you’ve already had taken from your pay will probably have been too high. This means you’ll be owed a refund.
Can I still claim a CIS refund if I applied for a government loan scheme?
Again, yes. The Self Assessment system is all about settling up fairly with the taxman. Any money you received from The Self Employment Income Support Scheme will be treated as taxable income on your Self-Assessment. Whether or not you get a government loan to see you through the COVID-19 outbreak, you’re still owed the rules covering CIS tax refunds are the same as before. Paying tax under the Construction Industry Scheme can mean you’re not getting the full benefit of your tax-free Personal Allowance so you should always make your claim.
What happens to my refund if my company went into liquidation?
If you’re working a PAYE job and jour employer goes out of business, you’re still entitled to your tax refund. As long as you’ve got all the details for your claim, there’s nothing to stop you getting back what’s yours. If you haven’t, RIFT can even help chase down the information from your former employer or get your pay details directly from HMRC to save you time.
I changed employers or employment status because of the pandemic. Can I still claim a refund?
When you change employers, you still keep your entitlement to a yearly tax refund. As long as you’ve got records to back up your claim, switching employers won’t stop you getting what you’re owed.
When you change your employment status, your tax situation changes with it. Moving from PAYE work to self-employment, for instance, means you settle up with HMRC through the Self Assessment system instead. However, anything the taxman still owed you from your PAYE days is still yours to claim. Meanwhile, because there’s tax being taken from your pay by contractors now, you could qualify to claim for that via your Self Assessment tax return.
The bottom line is that there’s no reason for the COVID-19 pandemic to stop you claiming the tax refunds you deserve. Get in touch with RIFT if you've got any questions, or use our quick calculator to answer 4 quick questions and find out if you can claim.
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