Thousands of individuals have not received tax refunds from HMRC, amounting to an average of £800 per person, as per recent data.

Various factors may lead to overpayment of income tax, with an incorrect tax code being the most common issue.

When taxpayers have overpaid tax, HMRC usually notifies them through a P800 tax calculation letter, providing instructions on how to claim the refund.

In cases of non-response, HMRC sends a cheque to the address on file, but statistics reveal that many of these cheques go uncashed annually.

Recent information obtained via a Freedom of Information request by The i Paper indicates that HMRC issued 1,746,720 cheques last year, of which 178,180 were never cashed, totaling £144 million in unclaimed refunds.

HMRC aims to minimize cheque issuance and prefers contacting taxpayers through digital methods instead.

Robert Salter from Blick Rothenberg highlighted concerns about HMRC’s continued use of cheques for tax refunds in many instances.

HMRC clarified that most PAYE repayments are now done through bank transfers, the default and fastest method for receiving refunds.

Tax codes consist of alphanumeric characters indicating the tax-free income allowance for a tax year, with the common code being 1257L for individuals with one income source.

Taxpayers can find their tax code on payslips, P45s (for job departures), or P60s (end of tax year) and online at GOV.UK.

To check the accuracy of their tax code, individuals can use a free calculator provided by MoneySavingExpert.com.

If taxpayers believe they have overpaid tax, they can contact HMRC by phone or through the HMRC app to claim a refund, which can be requested for up to four preceding years.

Even if taxpayers suspect long-term overpayments, especially due to errors, they can still inquire with HMRC for potential refunds.