I got £9,400 back from HMRC with a simple tax code trick – here’s how you can too

TAXPAYERS are invited by Martin Lewis to verify that they are on the correct tax code.

If your code is wrong, you may end up paying thousands of dollars more than you need to, and you’ll probably get your money back.


MoneySavingExpert.com Reader Emailed Claiming Thousands of DollarsCredit: Alamy

Your tax code determines the amount of income tax you pay on your earnings – so it’s important that you’re on the right one.

Michele sent an email MoneySavingExpert.com say that she had the wrong tax code and that she was paying too much.

She was featured in the site recent weekly email and said, “I checked my tax code and found I was taxed on every penny I earned.”

I was previously self-employed, but my code had not been updated with my employer.

Why has my tax code changed?
What does tax code 1275L mean?

“It took an hour on the phone with HM Revenue & Customs but I have now been refunded £9,400.”

Michelle used MoneySavingExperts Tax Code Calculator to help determine if his code was correct.

However, millions of UK workers are not benefiting from these refunds because they do not check that theirs is correct.

The code is usually a mix of letters and numbers – the most common tax code being 1257L.

We tell you how to check if you’re on the right tax code to help you avoid losing hundreds of pounds or if you’re not paying enough tax.

What is a tax code?

A tax code is used by you, your employer and your pension organization to determine the amount of income tax you must pay.

The tax owed to him is then automatically deducted from your packed payroll.

You can earn £12,570 between April 2022 and April 2023 before paying tax. This is called your personal allowance.

Most people pay the basic rate of income tax (20%) and the standard tax code for this is 1257L.

How do I check my tax code?

It’s worth checking to see if your employer is using the correct tax code or you could end up paying the wrong amount. It is especially important to do this if you have recently changed jobs.

You will usually receive a letter in the mail at the beginning of each fiscal year informing you of your tax code.

This year’s tax year began on April 6, 2022 and ends on April 5, 2023.

But if you didn’t receive a letter or can’t find where it is, there are several ways to check what your tax code is for the current tax year.

Your tax code will be displayed on your payslip, usually listed next to your national insurance number.

You can also use the government online tax audit tool to view your tax code.

How do I know if my tax code is wrong?

You can check if your tax code is correct using The HMRC online tool Where MoneySavingExpert’s Free Online Tax Calculator.

If this is false, contact HMRC to let them know on 0300 200 3300. If this is true, you don’t need to do anything.

HMRC will write or email you if they change your tax code – and they will also write to your employer about any changes.

How do I know if I owe a tax refund?

If you are entitled to a tax refund, HMRC will let you know by sending you a letter called a P800 or a simple assessment letter.

You won’t get a P800 until after the tax year is over – and the letter will arrive between April and November.

The P800 letters can also tell you that you have not paid enough tax and will have to repay it.

This letter will let you know if you can apply online via the the government website.

If you apply online, the money will be sent to your bank account within five days.

The government can also issue you a check by mail, but this will take longer.

How much could I get?

The amount you could recover depends on the tax code assigned to you, your salary and the amount of tax you should have been charged.

UK's cheapest supermarket for 153-item basket unveiled
I am a builder…these are the horrors people miss when buying a house

In some cases, you might be owed hundreds and in others, like Michele’s case, thousands.

You can get help from organizations like Advice to citizens Where Tax assistance if you’re having trouble figuring out how much you might recover.

Source link

Comments are closed.