Martin Lewis warns millions of workers to check their tax code now after NI hike

With the rising cost of living, money is on everyone’s mind. Money Saving Expert, Martin Lewis, has offered advice to millions of people across the country to help them save money.

Whether it’s changing the Wi-Fi and oven, heating your home, or even cooking family meals, people can try to cut costs in any way they can. And now Martin Lewis’ MoneySavingExpert website has urged workers to check that their tax code is correct. Otherwise, you risk overpaying thousands of pounds, reports the Mirror.

Your tax code is used by HMRC to determine the amount of tax you have to pay each month. It is made up of numbers and letters to represent how much you can earn before you start being taxed.

READ MORE:What to do if you’re struggling to pay your energy bills

But MSE claims millions of people are on the wrong tax code without realizing it – if that’s you, you could be owed tax money. This week (April 6) marked the start of the new tax year, so it’s worth checking now if your tax code is correct.

MSE said: “Your tax code is a series of letters and numbers (e.g. 1257L) that tells your employer or pension fund what tax to deduct. However, millions of codes can be wrong.”

The biggest change you will notice on your payslip is an increase in the amount of National Insurance you pay. Social Security contributions have just increased by 1.25 percentage points, from 12% to 13%.

The threshold at which you start paying has also just risen from £9,568 to £9,880 – but this is set to rise again, and by a bigger jump, from July. The rate at which you start paying will increase to £12,570 from July 6, meaning more low-income workers will keep more pay in their pockets, but not for a few months yet.

How to check your tax code

You should have recently received a letter from HMRC before the new tax year with your new code. Otherwise, you can find your tax code on your last payslip, or on your P45 if you recently left your job.

Gov.uk also has a dedicated web page where you can see your tax code. To check it online, you’ll need to register for a government gateway ID – it’s free.

The most common code for the current tax year is 1257L for people who have a job or a pension. But not everyone should be on this tax code – for example, people who have more than one job.

MoneySavingExpert just updated their free tax code calculator so you can get a rough idea of ​​how accurate yours is. To verify yours, you need to enter your pre-tax earnings and your current code. No tax calculator will be able to tell you for sure if you’re on the right code – but it should give you a good indication.

How to Claim a Tax Refund

If you suspect that you have paid too much, you can contact HMRC on 0300 200 3300. You can also speak to an advisor online via their live chat service.

HMRC will contact your employer to correct your tax code and you will recover any tax due on your next payslip. If you have been paying too much tax for some time, you can claim up to four additional years – so as far back as tax year 2018/19.

But if you underpaid, you will have to refund your tax. It is best to settle this as soon as possible to avoid having to repay a larger sum.

The repayment amount and frequency vary depending on your situation. You can also try to have the tax waived if it’s not your fault that you underpaid – but that’s no guarantee. You can do this by applying for a so-called ‘Additional Statutory Concession’ or A19 from HMRC.

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