How a tax refund can help tackle the cost of living crisis as average owed increases by 10.6 per cent annually

The latest research by tax specialists, RIFT Tax Refunds, has revealed that households across the nation are continuing to face a far higher cost of living, with energy bills 96% higher than they were a year ago, while other outgoings such as food and fuel have also risen compared to this time last year.

However, with the tax year ending, many could help negate this increased cost of living, as the average tax refund owed by HMRC has also increased, up 10.6% in the last year to £1,444.

RIFT Tax Refunds analysed the current cost of living for UK households, including energy bills, groceries and fuel, as well as how this has changed over the last year.

The research shows that the average household’s energy costs have climbed by 95.8% in the last year to an average of £2,500, an increase of £1,223.

The average household budget spent on groceries has also climbed by 9.6% to £3,598 – a £286 annual increase.

The cost of filling our vehicles at the pump has climbed by 2.1% to £81,84 for a full tank, while the cost of renting is up 9.8% and the average deposit for a home has increased by 6.3%.

As a result, households across the UK continue to face a far higher cost of living with their household finances being stretched ever thinner.

There is some good news though. The figures from RIFT Tax Refunds show that the average sum owed by HMRC via a tax refund has also increased, up 10.6% in the last year.

This means the average person claiming a tax refund is owed £1,444 when making a one year claim, while those making their first claim could be owed an average £3,000 when taking the last four years into account.

Bradley Post, MD of RIFT Tax Refunds, said, “It remains a pretty bleak outlook for households across the nation, as the cost of living continues to climb, stretching household finances to breaking point and beyond.

At the same time, we’ve seen interest rates continue to climb, adding further pressure to those struggling to make ends meet and unfortunately, there’s no end in sight just yet.

However, many people will be unaware that they could be entitled to a tax refund which could go someway in helping with the annual cost of running their home. The average sum owed by HMRC has increased quite notably in the last year and those who have never claimed before are able to backtrack a claim for up to four years.”