Consumer champion Martin Lewis has urged people to check their tax details for accuracy, explaining that incorrect tax codes can lead to paying the wrong amount of tax. He clarified how tax codes work, described the standard 1257L code, and noted that codes can vary based on employment perks. He recommended using online tax code calculators, especially for those with multiple jobs, and emphasized that individuals are responsible for verifying their tax code via payslips, the HMRC app, or the Government website.
Martin Lewis has urged people to check that their tax details are accurate. If your details with HMRC are incorrect or outdated, you could pay the wrong amount of tax.
On his BBC podcast, the consumer champion was asked a question by an NHS worker seeking his views on tax bands. This prompted Mr Lewis to issue a warning relevant to millions across the country. The advocate said: "The one big thing that we do need to be careful of, and which every one who is an employee needs to be careful of is, is your tax code correct.
" He went on to explain how tax codes work. Mr Lewis said: "You'll get a tax code, normally it will be four numbers and a letter. So the standard one is 1257L. What that means is add a zero, to the number, so 1257 becomes 12,570, that is telling you what your tax-free personal allowance is, the amount you can earn before tax.
" Every person receives a standard personal allowance of £12,570 per year, which means earnings up to this threshold are free from income tax. Mr Lewis was keen to highlight some of the intricacies involved.
'It can change and vary' He said: "It can change and vary depending on what employment perks you get. The letter is far more complicated. L is the simple one.
" The letter 'L' at the end of your code means you get the full personal allowance. Mr Lewis said help is available to understand your tax code. He said: "There are tax code calculators online that can decipher your tax code for you, and then hopefully help you work out whether you're roughly in the right tax code or not.
"That is worth checking, especially if you've got a second job. That's where the mistakes can happen.
" Your tax code can be found on your payslip, via the HMRC app, or in your personal tax account on the Government website. It falls to you personally to verify your tax code is accurate, not your employer. Should your tax code be wrong, you may need to amend your information with HMRC to rectify the situation. This can be requested through your personal tax account.
Alternatively, you can contact HMRC for assistance on 0300 200 3300. The helpline operates Monday to Friday between 8am and 6pm.
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