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How calculate tax refund

how calculate tax refund

Step 1

Add up all of your earnings for the financial year that you want to calculate your tax refund and look at your total tax contributions. The UK financial year runs from April 6 one year, to April 5 the following year. You cannot normally reclaim taxes until the end of the tax year, unless you are emigrating.

Step 2

Calculate your taxable income. You can find your taxable income by subtracting your income tax allowance from your gross income. Your personal income tax allowance is the amount you are allowed to earn tax-free each year and is normally denoted by your tax code, which you can find on your wage slips. For example, the tax code 647L represents £6,475, which is your tax-free allowance for the year 2010/2011.

Step 3

Determine your tax band to

find out how much tax you should have paid. UK taxes are deducted at different percentage rates, and in relation to your yearly salary. If you earn below £37,400 per year, then you would be expected to contribute 20 per cent of your income above your tax-free threshold. However, if your income is between £37,400 and 150,000, then you will be taxed a higher rate of 40 per cent. All earnings above £150,000 per year attract a 50 per cent tax rate.

Step 4

Use an online tax rebate calculator. Many British tax agents that have established themselves online as tax refund specialists provide a free-to-use tax rebate calculator. Enter details of your salary and tax contributions for a specific tax year, and the calculator will tell you within seconds how much tax refund you could be owed, if any.

Category: Taxes

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