Am I on the wrong tax code?​

Is my tax code wrong?

HMRC will alter your tax code from time to time, usually when your circumstances or tax-free Personal Allowance threshold change.

You should always try to keep track of your tax code, which thankfully really isn’t that hard to do. You can check your tax code by looking at your payslips, for example. If you’re moving to a new job, you should also be able to find your code on your P45 paperwork. After the end of a tax year, you’ll get a P60 from your employer, listing all your income and the tax you’ve paid. You’ll find your tax code listed on that, too.

The main thing to do when checking your tax code is to make sure it matches your basic situation. Most people with a single PAYE job will have the standard tax code of 1257L. This just means that they get the normal tax-free Personal Allowance of £12,570 with no special circumstances affecting the tax they pay.

Depending on your situation, your tax code might end up a little different from the basic 1257L one. If you’ve claimed certain kinds of tax relief or received any company benefits, for instance, the number before the “L” in your code might be different. This just means that you have to pay tax on a larger or smaller proportion of your income to account for your situation.

If you’ve got more than one job, have untaxed income or benefits that are higher than your Personal Allowance or haven’t given HMRC all the information they need, you might find yourself with one of the other types of tax code. You can read more about these here . Again, the main thing to do is check that your code looks like a good fit for your situation – and to kick up a fuss if it doesn’t!

Why is my tax code wrong?

You can be given the wrong tax code for a whole range of reasons. For example:

• HMRC might have changed your code after you claimed a tax refund for your work mileage or essential expenses. If those costs change year-on-year, your tax code won’t automatically keep up with them.
• HMRC might not have complete or accurate information about your situation. In some cases, this means you’ll be given a temporary “emergency” tax code until they get all the details they need.
• Occasionally, your employer – or even HMRC themselves – may simply get it wrong.

More on tax codes