01 June 2026
In the event an employer finds themselves in the position of either having credit in their Business Tax Account, or that they have overpaid on their PAYE liabilities, but no credit is showing on their account, they may be able to use the online tool to claim for a refund from HM Revenue and Customs (HMRC).
In order to claim, employers must first establish why the overpayment was made. Then they must compare what they’ve paid HMRC with what is owed in their tax account. There are several reasons why this may have occurred, such as:
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an overpayment being carried over from a previous tax year
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a statutory payment for parents, which the employer was entitled to reclaim from a previous tax year, showing on the account. However, this tool should not be used for current year advance funding for statutory pay
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a repayment being made to an employee in a previous tax year. For example, because the wrong tax code was used. Again, this tool should not be used to obtain a refund for an employee in the current tax year
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a correction was made to an employer’s report
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payments not taking student loan deductions into account
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leavers not being correctly reported to HMRC
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incentive payments being received from HMRC for submitting reports online
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payments not taking Construction Industry Scheme (CIS) deductions into account, or deductions being applied incorrectly by employers
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a payment being made for the wrong tax year
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the employer paying more than once for the same bill
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the employer paying an estimated amount in advance.
For duplicated or estimated payments, employers must tell HMRC what they paid, what they should have paid and why they paid the additional amount.
To proceed with the claim, employers will need to provide the company’s details, a business bank account and an estimate of the overpayment amount. Plus, details of the tax year, the reason for the overpayment, and details of the amounts owed or becoming due. Additional details will be needed should the claim be related to a director.
Alternatively, employers may be able to submit an application to deduct the repayment from corporation tax, VAT and other liabilities instead of requesting a full refund.
In the event an employer would like the refund to be paid directly to an agent or other nominated representative, they must submit a claim with a completed R38 form or provide a signed authority.
Claiming can be done online, though employers will need to sign in to HMRC using their Government Gateway log in or GOV.UK One login, and agents will need to sign into their Agent Services Account to do so, or claims can be sent via post and marked as ‘Employers PAYE Overpayment’.
If the application is successful, employers can expect the overpayments to offset tax liabilities owed or due, from current or previous tax years. However, if there are no outstanding payments, HMRC will issue a refund. For further support with your claim please contact the HMRC’s Employers Helpline.
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information.