You need to check as no-one else will do it for you
Millions of UK workers and pensioners could be paying more tax than they owe — and most have no idea it is happening, according to money saving expert Martin Lewis. Writing as part of his new tax year guidance for April, Martin issued an urgent reminder to anyone in employment or receiving a pension: “Millions of codes are wrong each year, so it’s crucial to check yours — it’s your responsibility, not your employer’s, not HMRC’s.” He warned on his BBC Sounds podcast: “Do not assume that because it’s coming from HMRC that it is right. Millions — and that is not an exaggeration, it’s a literal fact — millions are wrong every year.” The scale of the problem is significant. According to a Freedom of Information request submitted by accountancy firm UHY Hacker Young, 5.6 million people overpaid a combined £3.5 billion in income tax in the most recent tax year, with the average overpayment standing at around £689. HMRC paid around £3 billion back to 4.2 million people who had overpaid in the 2024/25 tax year alone, according to MoneySavingExpert’s own FOI data — but crucially, HMRC is under no legal obligation to notify individuals of overpayments or issue refunds automatically.
A tax code is the series of numbers and letters on a payslip that tells an employer or pension provider how much income tax to deduct. The most common code for the 2026/27 tax year is 1257L, which reflects the standard £12,570 personal allowance. If yours looks different and you are unsure why, it is worth checking. Errors are most likely to creep in after a life change. Lewis has flagged the most common triggers — starting a new job without a P45, having workplace benefits such as a company car end, receiving multiple sources of income, or starting to draw a pension. In any of these situations, HMRC may be working from out of date information. The good news is that overpaid tax can be reclaimed. HMRC allows claims to be backdated for up to four years, meaning anyone who suspects they have been on the wrong code can potentially recover a significant sum. The quickest way to check and claim is through the HMRC app or personal tax account at gov.uk. MoneySavingExpert also offers a free tax code calculator at moneysavingexpert.com. Stefani Williams, Partner at financial advisers Holden & Partners says this is something she sees regularly. “Tax codes can change after events such as a job move, starting to draw a pension, or receiving workplace benefits. It’s something that’s easy to overlook,” she says. “The common theme is that these things don’t usually correct themselves automatically. Taking a little time to review your position can make a difference.” Lewis’s warning comes at an important moment. The 2026/27 tax year only started on 6 April, meaning catching an error now — rather than at the end of the year — limits the amount of tax overpaid and speeds up any refund.
