With the rising cost of living, it has never been more important to ensure you are paying the correct amount of tax through your PAYE tax code. It is important to understand your tax code, any changes to this and why your tax code on your payslip is what it is. There are many reasons why your tax code may change, from receiving company benefits, having multiple income sources, or flat rate deductions relevant to your profession.
Whilst you may receive a refund for any overpaid tax on completion of your self-assessment tax return, would it not be better to pay the correct amount of tax in the first place?
How to check your tax code?
- Your most recent payslip will show your tax code, but it will not tell you how it has been calculated. Unfortunately, your employer will not be able to help you with this.
- HMRC will issue you with a tax code notice before the start of a tax year (usually in February or March) and thereafter if your tax code is subsequently changed. These notices are sent out by post but can be viewed online if needed.
- The easiest way to view the breakdown of your tax code is through your personal tax account (https://www.gov.uk/personal-tax-account). If you have not accessed this before, a first-time setup can take around 10-15 minutes.
Whilst reviewing your tax code, you may identify an error such as previous employment still appearing, or a company benefit that has now ceased. There are three ways to change your current tax code: online, over the phone, or with the help of your appointed agent.
Change your tax code online
Notify HMRC of a change in your personal circumstance through your personal tax account (https://www.gov.uk/personal-tax-account).
Change your tax code over the phone
If you would prefer to change your tax code over the phone, you can call HMRC’s Income Tax: General Enquiries on 0300 200 3300. Please note that you will need your personal details to hand, such as your National Insurance number and current address.
If you have any queries or need any assistance reviewing or changing your tax code, please get in touch with your usual Whitings contact.