The Chartered Institute of Taxation has warned that a computer blunder at HM Revenue & Customs (HMRC) means thousands of people could end up paying too much tax next year. To make sure you are not one of them, you need to check your tax code carefully.
HMRC will send out tax codes to about 25m taxpayers in the coming weeks. Many will simply be filed without being checked. But it is up to you to notify HMRC if there is a mistake, so make sure you double check your code to ensure that you pay the right amount of tax next year.
Here’s what to look for:
1. Check that all the basic information on your notice is correct. Is your name, National Insurance number and address right? And have they got your employer’s name correct?
2. Is your personal allowance correct? If you only have one employer and are under 65 this should be £6,475.
3. Check your tax code. This is usually made up of several numbers and a letter. The number, if you multiply it by ten, should come to – within £9 – the amount of income your are entitled to before you have to pay tax. For a full breakdown of what the letters stand for, see the HMRC website.