MARTIN Lewis has revealed the urgent tax checks that households need to do now – and they could save you thousands.
Martin Lewis issued the warning in the series finale of his ITV Money Show.
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It included four checks that need to be completed before the current tax year comes to a close.
The tax year ends on April 5, so with just under two weeks left, it might be a good idea to take action sooner rather than later.
Martin urged households to check their tax code, apply for marriage allowance if they’re eligible and claim back PPI tax, all before April 5.
The MoneySavingExpert founder added that because of a tax rule, you will only be able to claim back four years.
It means you might lose anything you’re waiting to claim back from the year 2018/19 if you don’t act quickly.
Here’s how Martin said you can check if you’re missing out and how to make a claim.
Check your tax code
Martin revealed that millions of taxpayers’ codes are wrong each year – and it’s your responsibility to make sure it’s correct.
That means you need to check to avoid forking out any more than you should.
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Your tax code is a combination of numbers and letters and tells your employer or your pension firm how much tax to take off you.
But the code won’t be checked by your employer or HMRC, so it’s down to you to make sure it’s right.
If it’s not, you could end up paying more than you need to in tax.
You could also be owed money back from the tax office after accidentally overpaying.
Some tax codes changed last year, so it’s a good idea to get clued up on what they mean – otherwise you could be out of pocket.
As the personal allowance (the amount you can earn before paying tax) is £12,570 – most people’s code should be 1257L, but you’ll have to check what yours should be.
You can check your code easily online – HMRC has an online tool or MoneySavingExpert has its own free online tax calculator.
Once you’ve got your code, look on your most recent payslip or P60 to see if it matches up.
If your code is wrong, contact HMRC on 0300 200 3300 and your updated tax code should show on your next pay slip.
If it’s right, you don’t need to do anything.
Martin said: “Millions of them are wrong and it is your responsibility. It’s not HMRC’s responsibility.
“It is not your employer’s responsibility. It is your responsibility to check it’s right.”
Apply for marriage tax allowance
Martin also urged 2.1million eligible couples to apply for back-dated marriage tax allowance if you’re eligible – as you’ll get a payout.
It only applies to non-taxpayers, usually someone earning less than the £12,570 personal allowance, who are married or in a civil partnership with a 20% rate taxpayer.
It’s a good idea to apply for the allowance if you’re eligible as it means the higher earner pays slightly less tax on their take-home pay throughout the year.
Martin explained that the non-taxpayer can give 10% of their tax-free allowance to the taxpayer in the couple.
And applying before April 5 means you could claim back £238 for the 2018/2019 tax year, he revealed.
If you claim for this tax year and backdate the maximum of four years, you could get up to £1,242.
He said: “It’s really easy to do. Absolute must.”
The Sun recently spoke to a mum-of-one who didn’t realise she could claim the tax relief while she was on maternity leave.
Claim tax back for a PPI payout
Martin also urged households to check if they had a PPI payout.
He said you should reclaim for the tax year you got the payout in through a R40 form, which you can get on the gov.uk website.
If you got a payout in 2018/2019, you’ve got less than a month to get a form in.
The deadline for making a claim on the mis-sold insurance policies was in August 2019, so you can’t get a tax refund if you haven’t already received a payout.
When the payouts were made, banks refunded the PPI Premium plus 8% in interest for each year since you took out the product.
The statutory interest part of your payout is liable to be taxed, and most firms deducted this automatically at the basic 20% rate before you got your money.
But since April 2016, more people have been due some of this tax back thanks to the introduction of the personal savings allowance.
This allows basic rate taxpayers to earn £1,000 a year tax-free interest on their savings, or £500 for higher-rate payers.
You can reclaim the tax on PPI payments going back four tax years, but get it in before the current tax year ends on April 5.
You can make a claim using the online service, or fill in the form on-screen, print it off and post it to HMRC.
Or call the income tax helpline on 0300 200 3300 if you need help submitting your claim.
One Martin Lewis fan got in touch with the show to say that he got more than £2,600 by filling in an R40 form.
Work uniform rebate
Whether it’s a branded t-shirt or scrubs, you could be owed hundreds of pounds in tax money.
How much your owed depends on your profession – ambulance staff have specialist clothing for insurance, so they’ll be entitled to more than a retail employee.
If it costs more to maintain your uniform, you’ll get more tax back.
If you’re a basic-rate taxpayer, you’ll get £12 back per year, because that’s 20% of £60.
Higher-rate taxpayers will get back £24.
But because the £60 is a flat-rate allowance, you won’t be required to record and send in the individual amounts you spend.
You can also backdate your claim by up to four tax years as well as the current year.
If you were a basic taxpayer who wore uniform during those years, this is what you could claim:
- 2022/23 – £12
- 2021/22 – £12
- 2020/21 – £12
- 2019/20 – £12
- 2018/19 – £12
Of course, some occupations require more wear and tear, like ambulance staff. Their maximum annual allowance for uniforms is £185.
That means basic-rate taxpayers would get £37 back each year they claimed, or £74 if they’re higher-rate.
Nurses and midwives have an allowance of £125 but can also claim shoes and tights, and so on.
You can search for your occupation here to check what you could be owed.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
