TTF Tackles the Money Monster Under Your Bed: Am I Paying Too Much Tax?

"Am I paying too much tax?" Honestly, it’s a question I keep asking myself — especially now, when every penny at home really counts. I’m not trying to dodge tax or do anything shady. I just want to know that I’m not handing over more than I should be. And lately, I’ve had this nagging feeling that I might be.

It started when I glanced at my payslip and realised I have no idea if my tax code is even right. It says 1257L, but what does that actually mean? Am I on the correct code? Has my employer updated it recently? I moved jobs last year and didn’t think to check at the time.

I also recently started doing a bit of freelance consulting on the side, and now I’m in the Self Assessment system. I submitted everything on time, but HMRC’s site has had me confused. I claimed some basic expenses, but I’m not confident I included everything I was allowed to.

And what about my pension? I heard people can get tax relief on pension contributions, but is that automatic or something I have to apply for? No one tells you this stuff — and I’m not an accountant, I’m just trying to get by.

Energy bills, food, mortgage, the kids’ activities… it all adds up. So the idea that I could be overpaying HMRC while struggling at home? That feels gut-wrenching but I don’t really know where to start when it comes to checking.

Should I speak to someone? Is there a way to review past years? What if I’ve been paying too much for years?

I’m not trying to cheat the system — I just want to know I’m getting it right. Or better yet, I want someone who knows what they’re doing to check for me. Because with everything else going on in life, tax shouldn’t be the thing that keeps me up at night."

Fear of overpaying tax is a very common thing to be anxious about and something that crops up with our clients time and time again. There are two ways you can go with this...let's take a look.

Option 1: How to Check If You’re Paying Too Much Tax – DIY Guide

If you're confident managing your finances solo, here's a step-by-step checklist to help you figure out whether you're overpaying tax in the UK:

✅ Step 1: Check Your Tax Code

• Find your tax code on your payslip or P60 (typically something like 1257L).

• Go to GOV.UK Tax Code Checker to see if it’s correct for your situation.

• Common tax code mistakes include:

• Using a previous employer’s code

• Incorrect benefits (like a company car) included

• Emergency codes (like BR, 0T, D0)

✅ Step 2: Review Your Personal Allowance

• For the 2025/26 tax year, you should get £12,570 tax-free income unless:

• You earn over £100,000 (your allowance reduces)

• Your tax code has been adjusted for other reasons

• Check if your full allowance is being applied — otherwise, you might be overpaying.

✅ Step 3: Review Any Additional Income

• If you earn freelance, rental, or other income, make sure it's reported on a Self Assessment tax return.

• Check you’re only taxed once on each source.

• If you earn under certain thresholds (£1,000 trading or property income), you may not owe tax.

✅ Step 4: Claim Available Reliefs & Allowances

These are frequently missed:

• Marriage Allowance

• Pension contribution tax relief (especially for higher-rate taxpayers)

• Working from home relief

• Gift Aid on charitable donations

• Rent-a-room relief

• Use HMRC’s online forms to backdate claims (in some cases, up to 4 years).

✅ Step 5: Check for Refunds

If your tax code was wrong or you overpaid, you may be due a refund.

You can:

• Log into your Personal Tax Account

• Or write to HMRC with evidence

Option 2: Get Help From a Tax Advisor — Let The Experts Do It For You

If this all feels overwhelming (or you just don’t want to risk missing anything), hiring a tax advisor with accountancy experience can save you time and money.

Here’s how to go about it:

🧾 Step 1: Find the Right Specialist

You want an advisor who:

• Understands both PAYE and freelance/self-employed income

• Has experience with tax code reviews

• Knows how to backdate claims and file amendments

• Is regulated and experienced in UK tax law

The Tax Faculty specialises in helping everyday UK taxpayers — especially creators, freelancers and professionals — figure out exactly how much tax they should be paying (and nothing more).

📅 Step 2: Book a Review Call

Visit our website or drop us a message to book a free consultation.

We’ll talk through:

• Your income streams

• Your current tax situation

• What reliefs and allowances might apply

📂 Step 3: Let Us Handle It

• We’ll review your tax code, Self Assessment (if relevant), and HMRC records

• If you’re due a refund or adjustment, we’ll handle the paperwork

• No jargon, no guesswork — just clarity and peace of mind

💡 Why It’s Worth It:

• Avoid overpaying year after year

• Get back money you might be owed

• Save time and stress

• Have a professional in your corner if HMRC has questions

Capital Gains Tax Expertise: The Tax Faculty LLP Managing Partner Charles Tateson Named UK Capital Gains Tax Advisor of the Year 2023

The Finance Monthly Taxation Awards recognises the achievements of tax professionals from around the globe.

Winning such an award is no small feat. It is a reflection of hard work, extensive knowledge, and an ability to navigate the intricacies of the UK tax system.

Read more about Charles and the award here.

Contact Us

Contact us today on freephone 0800 0016 878 for a free consultation on all tax issues, or fill out the handy form below and we'll get back to you as soon as possible.

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