Wednesday, 29 February 2012

Check Your Tax Code - You May be due a Refund!

Many of you will be receiving your payslips today, but just how many of you actually pay attention to them?  You probably know roughly how much you take home each month, but when was the last time you checked your tax code?

747L 
The current “normal” tax code is 747L (which gives you a tax free annual allowance of £7,475).  Your tax code may differ from this for a number of reasons:

  • You have more than one job.
  • You receive employee benefits from your employer (or had done so from a previous employer) such as a company car or healthcare insurance for example.
  • You have outstanding tax from previous tax years.
  • You have started a new job and haven’t handed in a P45 or completed a P46 form.
  • Your P45 from your previous job had the wrong code.
  • You receive a pension along with your salary.
If you tax code does differ to the “normal” code but you don’t know why, get in touch with HMRC and tell them that you think your tax code may be wrong.  You can phone the Employee Helpline on 0845 300 0627.  They will be able to explain what has affected your code or be able to investigate.



Another thing to look out for is if your tax code has an "X" , “Month 1” or “Week 1” suffix after it.  This means that your previous earnings and tax paid in this tax year are not being taken into account.  This could be for a number of reasons.
Often, the suffix arises after you start a new job and you’ve completed a P46 form.  747L X is most commonly used in this situation as it’s the “emergency tax code”.  If it’s still on your payslip phone HMRC as ask them if a cumulative code can be issued as soon as possible. 

It is possible there is an error with your code and you have over paid tax.
If this is the case, ask HMRC to issue a P6 notice with the correct coding immediately to your Employer.  If they receive it before your payroll is run in March, you could have a nice tax refund in you March payslip!


Alternatively, if you think there is a problem with your tax code you can send a copy of your P60  when you receive it in April or May (or P45 if you leave your job before April 6th) to HMRC along with a covering letter to ask them to check your tax code and amount you have paid this year.  


Send it to the address on your most recent correspondence for HMRC or to:

HM Revenue & Customs
Pay As You Earn
PO Box 1970
Liverpool
L75 1WX




For more 
information about checking your tax code and a handy tax code checker, visit the Money Saving Expert site. 

You can also find useful info on the HMRC website.








2 comments:

  1. I would have never though of checking tax code!
    And so much to consider, it is good to see this all nicely summarised. Succinct and easy to read!
    Saleha

    ReplyDelete
  2. Thanks, Saleha - glad you found it helpful! :o)

    ReplyDelete