The financial expert has warned viewers of his Money Show Live that millions of tax codes are wrong and that people need to check it to ensure they haven’t been overpaying
As we edge closer to a new tax year, with just under three weeks to go and numerous changes looming for benefits, bills, and personal finances, Money Saving Expert Martin Lewis was back on Tuesday night to address the nation’s urgent financial queries and hopefully help viewers save some of their hard-earned cash.
During his show, The Martin Lewis Money Show Live, he emphasised the importance of ensuring your tax code is accurate to avoid missing out on what could be thousands of pounds. Martin highlighted that many people’s tax codes, which are usually found on payslips and inform employers or pension providers how much tax to deduct, are often incorrect.
He advised viewers: “Urgently check if yours is correct, but more importantly – for the backdating, was correct in 2020/2021. Your tax code tells your employer or pension provider what tax to take from you.
“It normally looks something like this (1275L) – this is the typical one. Just so you know, add a 0 at the end and a £ at the beginning and that’s your personal allowance, or how much you can earn tax free each year. That’s what the tax code is saying.”
According to Martin, the common tax code 1275L indicates that an individual has a tax-free personal allowance of £12,750 per annum.
“Now, millions of these are wrong,” declared money-saving expert Martin Lewis, stressing the critical point that checking the accuracy of your tax code is the individual’s responsibility—not HMRC’s or your employer’s , reports the Express.
“And the crucial thing here, is that it is not HMRC’s responsibility, it is not your employer’s responsibility, it is YOUR responsibility to make sure it’s right.”
He further highlighted the urgency for the public to act now as the window to reclaim any overpaid tax from the 2020/2021 tax year is rapidly closing.
“You may have overpaid hundreds or thousands of pounds in 2020/2021 – this is your last opportunity to check if that’s right,” Lewis implored, and outlined the next step for viewers: “So go online to a tax code calculator which will explain what it meant and check if it is right, because if not you’re going to miss the opportunity to get it back if you overpaid.”
While individuals face a strict deadline to claim back any overpayments, ironically, should there be an underpayment, the government has a much lengthier period to demand its dues. Thus, taxpayers must square up with HMRC even if their initial tax calculation was incorrect.
