TTF Tackles the Money Monster Under Your Bed: I Think My Tax Code Is Wrong – How Do I Fix This?

"I’m pretty sure my tax code is wrong, and it’s really stressing me out. I just checked my latest payslip, and the code doesn’t look right compared to what I had last year. I haven’t changed jobs, I’m not earning drastically more, and I haven’t had any new benefits that should affect my tax. So why has it changed?

I’m worried that I might end up paying too much tax, or worse, that I’ll underpay and get hit with a bill later. I don’t want to deal with that kind of headache. I’ve tried looking online, but the explanations are confusing, and I don’t even know where to start checking if the code is actually wrong.

How do I find out what my tax code should be? And if it is wrong, how do I get it corrected? I really don’t want to sit on hold for hours with HMRC, but if that’s the only option, I guess I’ll have to. Any advice would be greatly appreciated!"

The Tax Faculty has received a surge in queries from people questioning their tax codes, and you’re absolutely right to be concerned. Millions of UK workers could be on the wrong tax code without realising it, leading to overpayments—or worse, an unexpected bill later.

Your tax code determines how much tax is deducted from your salary before you’re paid, and if it’s incorrect, you might have been paying too much or too little. Some common reasons for errors include job changes, multiple sources of income, or outdated information held by HMRC. The most common tax code for the current year is 1257L, but if yours is different, it’s worth checking why.

You can find your tax code on your payslip, P45, or through your online Government Gateway account. There’s also a free tax code calculator on Money Saving Expert that can help flag any potential issues.

If your tax code is wrong, HMRC can correct it—either through your employer or via a refund for past overpayments. You can claim back overpaid tax for up to four years, and refunds are usually issued by cheque. If you’ve underpaid, it’s best to address it sooner rather than later to avoid accumulating a larger debt.

If you need to get in touch with HMRC, their helpline is 0300 200 3300, but be warned—call wait times can be frustratingly long. The HMRC app may be a quicker alternative for checking and updating your details.

Given how many people are affected, you’re absolutely right to question your tax code. It’s always better to check now rather than face financial surprises later!

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.

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