Tax code: Martin Lewis warns millions of workers could have the wrong tax number, how to check and get a refund

Martin Lewis says millions of people could have entered the wrong tax number and could have thousands of pounds returned

Martin Lewis warned millions of workers in the UK that they could be doing it wrong Tax code and could be due to return thousands of pounds.

A reader contacted Lewis and explained how she claimed £5,000 after entering the wrong tax number for four years.

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What is a tax code?

The tax code is used by your employer to work out how much tax is taken from your salary or pension.

Your tax code is a combination of numbers and letters that represents how much you can earn before taxes start.

Everyone in the PAYE system should be given one.

The most common code for the current tax year is 1257L for those with a job or pension.

If you enter the wrong tax number, you may pay too much or not enough tax each month.

In his most recent MoneySavingExpert email, Martin warns: “Millions of people are wrong every year and the rules say YOU HAVE RESPONSIBILITIES to check if it’s correct (not the employer’s or HMRC‘S).”

How to check your tax number

Looking at your payslip or P45 is the fastest and simplest way to check your tax code.

You can also ask human resources if they can tell you your tax identification number.

The GOV.UK website has a page dedicated to allowing people to check their tax number. To check online, you will need to apply for a government portal ID.

For anyone with the most common tax code 1257L, that means you could earn £12,570 before taxed in tax year 2021/22.

Check if you have the correct tax code

MoneySavingExpert has a free tax code calculator for a rough idea of ​​whether your current tax number is correct.

To check your earnings you will need to enter your pre-tax earnings and your current code and the calculator will tell you if you are on the right code as no calculator can tell you determined.

If you recently started a new job or you didn’t give your employer enough information about your situation, you may have the wrong tax number.

How to claim your tax back if you have overpaid

Depending on how much and how long you overpaid, you could get thousands of pounds back.

By calling 0300 200 3300 to contact HMRC, you can investigate the best course of action for you, or you can talk to them online via their live chat service.

If your tax ID is incorrect for the current year, HMRC will contact your employer and you will receive any tax owed on your next paycheck.

You can claim up to four years back for tax year 2017/18.

If you think you’ve paid more than this, you can contact HMRC to investigate.

What happens if you pay lower taxes?

If you realize you paid lower taxes, you will owe HMRC money.

To avoid having to return a larger amount, it is best to contact them immediately and let them know.

You can arrange your payment schedule depending on your circumstances.

Since it’s not your fault, you can try and get the tax cleared, although this is not a guarantee.

This can be done by requesting a so-called “Statistical Supplemental Concession” or A19 from HMRC.

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Emma Bowman

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