You can check that your details with HMRC are correct in several ways
Taxpayers are being urged to review their records as countless people have incorrect information registered with HMRC. Consumer website MoneySavingExpert (MSE), founded by Martin Lewis, has warned that millions need to update their details with the taxman.
In a social media alert, the organisation said: “A new tax year means it’s a good time to check your tax code. If it’s wrong, you could be due £1,000s back.” The message highlighted that “millions are wrong each year” and stressed that checking your tax code is correct is your personal responsibility.
This means if you are in employment, it falls to you to ensure your code is correct, not your boss. The MSE team highlighted a success story from someone who’d clawed back a huge sum after being on an incorrect tax code for several years.
£9,400 refund from HMRC
The taxpayer, called Michele, explained: “I was being taxed on every penny I earned, without any allowance. I’d previously been self-employed, but stopped trading three years ago and my tax code hadn’t been updated with my employer.
“It took an hour on the phone to HMRC, but I’ve now been refunded £9,400.” Your tax code dictates how much tax your employer or pension provider deducts from your income.
You’ll find yours on a recent wage slip or on a Tax Code Notice letter, should HMRC send you one. Everyone receives a standard tax-free allowance, enabling them to earn up to £12,570 per year without paying income tax on those earnings.
You could overpay thousands
However, if you’re on an incorrect tax code, there’s a risk this allowance might not be properly allocated to you. If you’ve missed out on the allowance as a basic rate taxpayer, you could unnecessarily fork out an additional £2,514 annually in tax.
Should you have been wrongly taxed in this way over three tax years, you could mistakenly hand over an extra £7,542 to HMRC. The tax authority previously said: “Anyone who thinks their tax code is incorrect can update their details on our app or via their online tax account, or contact our helpline if unable to go online.” The contact number is 0300 200 3300.
The most prevalent tax code is 1257L, which shows you’re eligible for the full £12,570 personal allowance. If HMRC discovers you’ve overpaid tax, you’ll receive a P800 tax calculation letter in the post.
This will explain how you can reclaim the money. You may be able to do so through the gov.uk website or using the HMRC app.
