Stopping working during the tax year

If an employee stops working due to unpaid leave or sabbatical year during the tax year, their taxable income has effectively ceased. In these situations, it becomes very likely that the income received prior to stopping work was subject to tax withholdings as if that individual would continue working until the end of the year, and therefore, that individual is entitled to a tax refund through filing a tax return for the relevant year.

Every reason for ceasing work over the course of the tax year could make that individual eligible for a tax refund.

This is caused by the fact that payroll software calculates tax on the income received based on the assumption that the employee will continue working throughout the entire tax year. Ceasing work during the course of the year invalidates this calculation and almost certainly creates a tax entitlement.