Make sure you are paying the right tax code
You could be losing out on thousands of pounds a year by
being in the wrong tax code, so check to make sure it’s
correct. But remember: if you ask HMRC to investigate, it
could find that you need to pay more tax and revise your tax
code upwards. Try these three tips to stay on top of your
HMRC recommends you keep important information and paperwork
about your tax for future reference. This includes payslips,
PAYE coding notices, statements of account, bank statements,
and dividend vouchers. You should also keep any
correspondence you have had with HMRC.
Use HMRC’s tax calculator
HMRC has an income tax ‘quick check’ calculator, which
allows you to see whether your tax code is correct. For
this, you’ll need your pre-tax earnings for the tax year,
the total tax you paid on your earnings for the year, the
amount of interest from your savings accounts after tax, and
the total tax you paid on these saving accounts.
You should always inform HMRC of any changes to your
circumstances, which could affect the amount of income tax
you pay. This includes: if you get married; you start to
receive a second income; you become or stop being
self-employed; you start to get company benefits, such as a
company car; or you start to get a state pension.
If you are sure you’re on the wrong tax code, you can ring
HMRC on 0300 200 3300 or contact it via its website. If in
doubt, you could always employ the services of an accountant
before you speak to HMRC. The upfront cost could end up
saving you a lot of money.
Don’t pay more tax than you have to