MARTIN Lewis is urging people to check their tax codes as one person revealed she got a £5,000 refund from the taxman.
The MoneySavingExpert says both workers and pensioners should check their code to make sure they’re not overpaying on tax.
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Being on the wrong tax code could cost you thousands of pounds in overpayments.
Luckily, it’s very simple to check and you could be due a refund.
Martin Lewis said the warning wasn’t just for workers, it applies for pensioners too.
One reader, Lesley, emailed in to tell the MoneySavingExpert how she had checked her code and received a whopping £5,000 refund from HMRC.
She said: “I read Martin’s advice to check your tax code. I’d never bothered to check as I was paid the same each month.
“But when I looked into it, for the past four years, I was on the wrong code. Nice £5,000 refund on its way.”
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It’s estimated that millions of tax codes are incorrect each year.
And unfortunately, the onus is on the individual to check – not HMRC or your employer.
You can find your tax code either on your payslip, P45 or P60.
If you’re a pensioner, it will be on your pension advice slip or you can contact HMRC if you’re not sure.
The standard code for a basic rate taxpayer is 1257L.
This indicates you can earn £12,570 before you start paying tax.
MoneySavingExpert has a tax calculator that can help you find out if your tax code is correct and HMRC has one too.
If it’s wrong, contact HMRC to let it know on 0300 200 3300. If it’s correct, you don’t need to do anything.
HMRC will write to you or email you if it changes your tax code – and will contact your employer about the changes too.
If you’re owed a rebate, HMRC will send you a P800 letter – this is the same letter that bears the bad news if you’ve underpaid tax as well.
If you’re owed money, you can claim online and should get the money through in about five days.
If you prefer a cheque, it could take up to 45 days.
However, there are limits on how far back you can claim and you won’t be able to get a refund on overpayments from before April 2017.
Organisations such as Citizens Advice and TaxAid might be able to help if you’re struggling to work out how much you could get back.
Saving what you can on tax has never been so important, as the cost of living crunch starts to bite.
Inflation has now hit a 30-year high of 5.4%, forcing up the cost of everything from groceries to petrol.
And National insurance tax is set to rise by 1.25 percentage points in April, costing workers hundreds of pounds.
But millions of married couples could be owed up to £1,220 through the marriage allowance.
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