Financial advice

Double Check Your Tax Code – HMRC May Owe You Money

Posted by MoneyController on 08.02.2021

It’s been reported that some taxpayers have discovered discrepancies with their tax code. Once HM Revenue & Customs(HMRC) was updated, thousands of pounds, spanning several tax years, have been refunded.

A tax code is a series of numbers and letters that your employer or private pension provider uses to determine the amount of money that should be deducted from your salary to pay taxes. Normally, HMRC will send you a letter indicating your official tax code for the next tax year and the reasons behind the decision. You can also find your tax code on your pay slip if you are an employee.

Your tax code is based on the standard tax-free personal allowance of £12,500. Then things like job benefits, such as medical insurance, the company car, etc. are deducted from that amount. The high-income child benefit charge only affects certain individuals earning more than £50,000 a year.  If your income comes from a job or pension, your code is 1250L for 2020-21. This is the most common tax code. If you want to know whether you have the right tax code, you may use various online tax calculators or seek out the advice of a financial or tax advisor.

Check your tax code to verify it is the correct one for your situation. Sometimes they can be outdated or contain incorrect information. Tax codes are issued based on the latest information HMRC has about you. They change your tax code only when they are notified of any changes. So be sure you inform the tax office about any important changesregarding your income. Doing so could affect the amount of money you have to pay through your personal tax account. 

Sunday, January 31st was the due date for filing your 2019-20 Self-assessment Tax Return. Nevertheless, The HMRC has stated that forms submitted after this date would not be penalised as long as they are submitted before February 28th.

 

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