A person may cease to work due to a number of reasons and circumstances. It may include retirement, redundancy by employer, return to education, cessation of a contract term or being unemployed. For purposes of tax, HMRC counts from 6th April one year to the 5th of the next. If an individual finish his employment; for any reason during the year,with P50 form he can claim repayment of tax.
The claim for repayment may cover the entire year or initial unemployment repayment. It will vary with individual circumstances. Any individual reclaiming the tax will have to fill and complete form o. If a person comes to know that he is now onwards unemployed and will not receive taxable benefits or pensions, he or she can claim complete year tax repayment with P50 form.
P50 Tax Form
In order to be classified as an unemployed who is eligible to fill P50 form, a person should have been unemployed for at least a period of four weeks. Any unemployment of less then 4 weeks should be reported in part 2 and 3 of P45 form and not separately in P50 form. However, essentially the part 2 and 3 of form P45 will also enable you to claim tax repayment.
In case, an individual is unemployed for four weeks or less and is expected to commence employment soon or expected to claim a benefit in later part of tax year, both form P50 and part two and three of form p45 should be filled. Tax repayment will cover a period up till the date the form is submitted on.
Submit HMRC P50 Form
Once an individual has successfully submitted the HMRC P50 form, a revised p45 will be issued to him/her that will show amended tax figure and verify that he/she has received the tax refund. If after four weeks the individual is still unemployed, he/she can make a second claim. The process can be repeated up till the end of tax year.
If, for say, an individual claimed tax repayment for an entire year but took up an employment during the year after receipt of his/her refund, the individual may pay a complete year tax on yearly income as annual personal allowances would have been allocated against the income that the individual previously received during the tax year.