Martin Lewis warns workers to check for code on payslip that could be adding to bills

MARTIN Lewis has urged workers to check their tax code for a simple mistake that could cost you hundreds of pounds.

If you’re on the wrong code you might be paying too much income tax, but you’ll be able to claim the money back.

For example, you might be put on an emergency tax code if you’ve recently changed jobs, meaning you won’t get your tax-free personal allowance.

And if you have an ‘X’ at the end of your tax code, this could mean you’re paying emergency tax.

The MoneySavingExpert founder issued the warning during The Martin Lewis Money Show on ITV.

A viewer called Tina wrote in to the show to say that she had been overtaxed and wanted to know if she was entitled to a rebate.

She said: “I’m on a 16 hour contract, and last month, I did lots of overtime.

“I was put on the basic rate temporarily and overtaxed by more than £800.

“My tax code is now back to 1257L, but I’m short £500, worrying about money. Will I get a tax rebate?”

A tax code is used by your employer to work out how much income tax to take from your pay.

You can find out what tax code you’re on by checking your payslips or asking your company’s human resources department.

The most common tax code is 1257L – it is for basic-rate tax payers, who are those earning between £12,501 and £50,000.

Tax expert Rebecca Benneyworth, who also appeared on the show, said it likely viewer Tina is on an emergency tax code.

She said: “So it depends whether she’s on a month tax code or not.

“And month one is quite often referred to as an emergency code.

“If she is, she needs to sort that with HMRC, either by phoning them, or going into her personal tax account through the HMRC app.

“On the tax code, she’ll have 1257L, if she’s got an X on the end, she’s on month one now.

“Otherwise if it’s not got an X on the end, it should come back in her next pay packet. And if it doesn’t, speak to your employer.”

Martin added: “If you got an X, you’re on emergency tax, so you’re going to be paying more.

Often the tax office will automatically place you on the emergency tax code until you contact them to tell them otherwise.

This can happen if you’ve recently moved jobs, not given your workplace your P45 or filled in a starter checklist form.

Martin explained millions are on the wrong one and could be either overpaying or underpaying.

So while this means you might get money back from the tax man if you’ve overpaid, you might also have to pay some back if you’ve underpaid.

We explain how to check your tax code – and what to do if you’re on the wrong one.

How do I check my tax code?

Your tax code will be displayed on your payslip, usually listed near your National Insurance number.

Your company has to provide you with a payslip, so if you’re not sure how to access it, ask your employer for guidance.

You can also use the government’s online tax checker tool to view your tax code.

What should I do if I think it’s wrong?

You can check if your tax code is correct by using HMRC’s online tool or MoneySavingExpert’s free online tax calculator.

If it’s wrong, you should contact HMRC to let it know on 0300 200 3300.

HMRC will write to you or email you if they change your tax code – and they will also write to your employer about any changes too.

Then, your updated tax code should show on your next pay slip.

How do I know if I’m owed a tax refund?

If you are due a tax rebate HMRC will let you know by sending you a letter called a P800 or a simple assessment letter.

However, P800 letters can also tell you that you haven’t paid enough tax, and you’ll have to repay it.

You will only get a P800 after the tax year has ended, which will arrive between April and November.

This letter will tell you if you can claim online through the government’s website. 

If you claim online the money will be sent to your account in about five days.

Or you can wait for 45 days and the government will send you a cheque in the post.

Meanwhile, Martin Lewis has warned households earning less than £40k to do urgent check.

And he reveals how thousands could turn £800 into £5,000.