Home » latest » Warning as simple payslip ‘mistake’ could see you paying more tax from your salary
warning as simple payslip mistake could see you paying more tax from your salary

Warning as simple payslip ‘mistake’ could see you paying more tax from your salary

People are being urged to check their tax code as a “costly mistake” could see them losing more of their salary to HM Revenue & Customs (HMRC). A tax expert has warned workers to check whether their tax code is correct. This is because it can be possible for your tax code information to be inaccurate, or out of date, without you realising, as reported by the Express. This would result in incorrect taxes being taken from your wages and pensions. Tax codes are made up of a series of numbers and letters – and are assigned by HMRC based on the information it has on your income. The information is passed on to HMRC by your employer or pension provider. Read more: Drivers urged to make simple tyre check to avoid £10,000 fine and 12 points The tax code will dictate how much of your income is taken in tax – and everyone who is paid through PAYE has one. As reported by the Mirror, Adam Bennett, a workplace expert at Digital ID, said: “If your tax code results in too much tax being deducted, you might receive a smaller paycheck and could struggle financially until you reclaim the excess tax. “A wrong tax code could also mean you’re underpaying tax, leading to a surprise bill from HMRC later, possibly with interest and penalties. Incorrect deductions reduce your disposable income, impacting your ability to manage expenses or save.” To check your tax code, look through your payslip or P45 if you’ve recently left a job, or a P60 at the end of a tax year. Alternatively, you can find your tax code on the Gov.uk website. According to HMRC, it falls upon each taxpayer to ascertain that they are assigned the correct tax code. Mr Bennett added: “Keeping an eye on your tax code and understanding its implications is essential for managing your finances effectively. Mistakes can happen, but by staying proactive and informed, you can catch errors early, avoid unexpected bills, and ensure you’re not paying more than you should.” Full list of tax code letters – and what they mean L – You’re entitled to the standard tax-free personal allowance 0T – No personal allowance BR – All income from this source is taxed at the basic rate DO – All income from this source is taxed at the higher rate D1 – All income from this source is taxed at the additional rate K – Total deductions exceed their allowances M – Marriage Allowance receiving 10% of their spouse or civil partners’ personal allowance N – Marriage Allowance providing 10% of their unused personal allowance to their spouse or civil partner NT – No tax is due on this income C – Paying income tax in Wales S – Paying Scottish rate of Income Tax in Scotland T – Tax office needs to review the tax code or to keep personal details confidential W1 or M1 – Emergency tax codes for week one or month one depending on when a person gets paid.

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x
Verified by MonsterInsights