You may be entitled to a refund - check your tax code now!
- TBA
- Feb 28
- 2 min read
Updated: Mar 13
Many people unknowingly overpay their taxes when filing with HMRC - don't underestimate this potential oversight.
Over the course of a tax year, individuals could end up overpaying by thousands, even tens of thousands of pounds. If you let HMRC keep this money, you'd be taking a big loss!
Recently, we’ve helped many clients successfully reclaim their overpaid taxes.
Checking for Overpayments
Sometimes, HMRC will automatically send you a refund via cheque. However, this isn’t always the case, and some refunds may be missed.
You can verify your tax situation by registering and checking through the Government Gateway:
Log into your account.
Check your annual tax details.
Contact online support to explain your situation.
Apply for a refund.
Refunds can only be issued via cheque sent to a UK address, so be sure to plan ahead!
Tax Codes: How They Work and Why They Matter
Your tax code is assigned by HMRC and tells your employer how much Income Tax to deduct. It reflects your personal tax allowance and applicable tax rate for the specific tax year.
Tax codes, such as 1257L or BR, can be found on your payslip, P45 (employment termination form), or P60 (annual tax summary).
Breakdown:
Numbers: Indicate your Personal Allowance (tax-free income limit). For example, 1257 means a tax-free allowance of £12,570 (2023/24 tax year).
Letters: Reflect specific circumstances or adjustments to allowances.
Common Tax Codes:
L: Standard tax code for full Personal Allowance
M/N: For Marriage Allowance (transferred or received allowance between spouses)
BR: Basic Rate (20%) applied to secondary income
D0/D1: Higher (40%) or Additional (45%) tax rates
K: Benefits or income exceeding your allowance, requiring additional tax
NT: No tax due (e.g., certain overseas income)
S/C: Scottish or Welsh tax rates
Emergency Codes:
Codes ending with W1, M1, or X (e.g., 1257L W1) indicate temporary emergency codes
When and Why Tax Codes Change
Tax codes can change due to factors like changes in Personal Allowance, job switches, or multiple income sources.
Common triggers include:
Starting a new job without a P45 form
Receiving additional income (e.g., from a second job or pension)
Changes in salary or benefits
Starting or stopping taxable state benefits
If your tax code changes, HMRC will notify you and your employer via a P2 Notice of Coding.
Ensure Your Tax Code is Correct
To avoid overpaying or underpaying tax:
Check your payslip regularly for the correct tax code
Update your tax details if your circumstances change (e.g. marriage, new job)
Apply for allowances like Blind Person’s Allowance or professional expenses
Review HMRC notifications for accuracy and explanations
If your deductions seem incorrect, it may be due to a tax code error. Contact HMRC promptly to correct it.
Need Help?
If you’re unsure about your tax situation, overpayments, or how to file your return, consult a professional tax expert or accountant.
A specialist can help you reclaim overpaid taxes and navigate the filing process with ease.