You could get £1,000’s for double checking your tax code.
Everyone has to pay tax at some point, however in lots of cases HMRC can get things slightly wrong. Lots of people automatically trust that they have been put on the correct tax code. However, you could have been paying too much to the tax man for a long time without even knowing. For this reason It’s always best to double check at some point that you’re on the right tax code.
What are tax codes?
You will be able to find your tax code on your wage slip or your P45.
If your code is a number followed by a letter, you can find out the total amount of income you can earn in a year before paying tax by multiplying the number by ten.
Here are what the letters stand for:
- L: You get the basic personal allowance
- P: You are 65 to 74 and get the full personal allowance
- Y: You are 75 or over and get the full personal allowance
- V: You are 65 to 74, eligible for the full personal allowance and the married couple’s allowance and just pay basic rate tax
- K: You get no tax-free pay or owe money to HMRC
- T: HMRC needs further information, so cannot allocate another code
- BR: You are taxed at the basic rate
- DO: You are taxed at the higher rate of tax
- NT: No tax is to be taken from your income or pension
CLICK HERE to use the Government’s tax calculator.
What to do if you think you are owed a rebate.
If you think that you’re on the wrong tax code then you need to tell HMRC and they’ll double check for you. If they agree that you’re on the wrong code then they’ll adjust it for you. Fill out this form with all of your information on and they’ll send you rebate. If you have been on the wrong tax code since you first started your job, you could be rebated thousands of pounds.
If you think your tax code is wrong and you aren’t paying enough, then it is still important to inform HMRC as soon as possible. You will then be asked to pay back the amount of tax you owe spread out over the year. The longer you leave it to double check, the more you could eventually have to pay back if you are underpaying.
CLICK HERE for full information on the Governments website.
CLICK HERE for more information on This Is Money.