Martin Lewis warns millions of workers to check their pay slip after tax changes

Martin Lewis and his MoneySavingExpert website has explained how to check your tax code as the new tax year begins. If you’re on the wrong tax code, you could be paying too much to the taxman

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National Insurance contributions have just increased by 1.25 percentage points, from 12% to 13%

Workers are being told to check their pay slips after new tax year and national insurance changes came into effect.

Consumer expert Martin Lewis said workers should check they have not been overcharged by the tax office.

Your tax code is used by HMRC to determine how much tax you should be paying each month.

It is made up of numbers and letters to represent how much you can earn before you start being taxed.

If you’ve had a pay packet since April 6, you should check to see if you’re on the right tax code.

If it’s wrong, you might be able to reclaim cash you’ve overpaid.

It could also show whether you’re underpaying tax, to help you “avoid a future nightmare”, the money champion said.

Workers who are unsure what code they should be on can look at their payslip, P45 or P60 form.

Ask your human resources department for these if you need assistance in locating it.

If you have just one employer and earn under £ 100,000, your code is likely to be 1257L.

Martin Lewis’ top money advice

The biggest change you’ll notice on your payslip is an increase of how much National Insurance you’re paying.

National Insurance contributions have just increased by 1.25 percentage pointsfrom 12% to 13%.

The threshold for when you start paying has also just gone up from £ 9,568 to £ 9,880 – but this is due to rise again, and by a bigger jump, from July.

The rate at which you start paying will go up to £ 12,570 from July 6 – meaning more low income workers will keep more pay in their pockets, although not for a few months yet.

Your tax code might be wrong if you’ve recently changed jobs, have more than one income or recently moved to different hours after being on furlough during the pandemic.

It can also be affected if part of your salary is made up of company benefits or any salary sacrifice schemes.

People who have just started their first job are often put on an emergency tax code, and will wrongly be charged a higher rate.

How to check your tax code

You should have recently received a letter from HMRC ahead of the new tax year with your new code.

Otherwise, you can find your tax code on your latest payslip, or on your P45 if you have recently quit your job.

Gov.uk also has a dedicated webpage when you can see your tax code.

Have you managed to claim back £ 1,000s from HMRC? Let us know: [email protected]

To check it online, you will need to register for a government gateway ID – this is free to do.

The most common code for the current tax year is 1257L for people who have one job or pension.

But not everyone should be on this tax code – for example, people who have more than one job.

MoneySavingExperthas just updated its free tax code calculator so you can get a rough idea as to whether yours is correct.

To check yours, you need to enter your earnings before tax and your current code.

No tax calculator will be able to tell you for definite if you are on the right code – but this should give you a good indication.

How to claim back tax

If you suspect you’ve been overpaying, you can contact HMRC on 0300 200 3300. You can also speak to an advisor online via their live chat service.

HMRC will contact your employer to correct your tax code, and you’ll get back any owed tax in your next payslip.

If you have been overpaying tax for some time, you can claim back up to four additional years – so as far back as the 2018/19 tax year.

But if you have been underpaying, you will need to pay your tax back.

It is better to sort this out sooner rather than later to avoid having to pay back a larger sum.

How much you pay back, and how often, will vary depending on your circumstances.

You can also try and get the tax written off if it was not your fault that you underpaid – but this is not a guarantee.

You can do this by asking for a so-called “Extra Statutory Concession” or an A19 from HMRC.

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