Martin Lewis and his MoneySavingExpert website explained how to check your tax number at the start of the new tax year. If you have the wrong tax code, you may be paying too much to the tax office
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Martin Lewis’ MoneySavingExpert website has urged workers to check their tax numbers are correct – or risk thousands of pounds overpayment.
Your tax code is used by HMRC to determine how much tax you should pay each month.
It is made up of numbers and letters to represent how much you can earn before you start taxing.
But MSE claims millions of people have the wrong tax number without realizing it – if you are, the tax office could give you money back.
This week (April 6th) marked the start of the new tax year, so it’s worth checking now that your tax code is correct.
MSE said: ” Your tax number is a series of letters and numbers (e.g. 1257L) that tells your employer or pension plan what taxes to deduct.
“However, millions of codes could be wrong.”
Martin Lewis’ best money advice
The biggest change you’ll notice on your paycheck is an increase in the amount of Social Security you pay.
Social Security contributions just went up 1.25 percentage points from 12% to 13%.
The payment start threshold has also just risen from £9,568 to £9,880 – but this is set to rise again and with a bigger jump from July.
The rate at which you start paying will rise to £12,570 from July 6 – meaning more low-income workers will be keeping more salary in their pockets, if not for a few months yet.
How to check your tax number
You should have received a letter from HMRC with your new code recently before the new tax year.
Otherwise, you can find your tax number on your most recent payslip or on your P45 if you recently quit your job.
Gov.uk also has a dedicated website where you can see your tax number.
Did you manage to reclaim £1,000 from HMRC? Let us know: firstname.lastname@example.org
To check it online, you need to register for a government gateway ID – it’s free.
The most common current tax year code is 1257L for people who have a job or a pension.
But not everyone should be on this tax code — for example, people who have more than one job.
savings expertjust updated their free tax code calculator to give you a rough idea if yours is correct.
To verify yours, you need to enter your pre-tax income and your current code.
No tax calculator will be able to tell you for sure if you’re on the right code – but this should give you a good indication.
How to request the tax refund
If you suspect you have paid too much you can contact HMRC on 0300 200 3300. You can also speak to an advisor online using their live chat service.
HMRC will contact your employer to correct your tax number and you will be refunded any tax owed on your next payslip.
If you have paid too much tax for a long time, you can claim back up to four more years – i.e. starting with the tax year 2018/19.
But if you underpaid, you’ll have to pay your taxes back.
It is better to sort this out sooner rather than later in order not to have to pay back a larger sum.
How much and how often you repay depends on your circumstances.
You can also try to write off the tax if it’s not your fault that you underpaid – but this isn’t a guarantee.
You can do this by applying for an Extra Statutory Concession or A19 from HMRC.
https://www.mirror.co.uk/money/martin-lewis-warns-millions-workers-26647400 Martin Lewis warns millions of workers to review their tax laws now after NI increase