How to Resolve Issues with Incorrect Tax Codes
If you discover that you have been assigned the wrong tax code, it’s important to address the issue promptly to avoid overpayment or underpayment of tax. Follow this guide for specific steps to resolve tax code problems:
1. Understand What a Tax Code Is
Definition: A tax code is a combination of numbers and letters used by HMRC to determine how much tax to deduct from your income.
Common Codes: "1257L" is the standard code for most people; emergency tax codes often start with "BR," "0T," or "W1/M1."
2. Check Your Payslip
Locate the Code: The tax code can be found on your payslip, usually near your gross pay or tax deductions.
Cross-Check with HMRC: Compare the code on your payslip with the one HMRC has issued.
3. Identify Potential Reasons for Incorrect Codes
New Job: Emergency tax codes are often applied when starting a new job without a P45.
Second Income: You may have been assigned a different code for secondary employment.
Taxable Benefits or Allowances: Changes in benefits (e.g., a company car) can impact your code.
Personal Circumstances: Marriage, divorce, or other life changes can affect your code.
4. Gather Necessary Documentation
Payslips: Keep recent payslips for reference.
P45 or P60 Forms: These forms show your previous income and tax deductions.
Letters from HMRC: Any correspondence detailing your tax code.
5. Contact Citrus’s Payroll Department
Verify the Code: Confirm with payroll that they have the correct tax code on record.
Provide Additional Information: If necessary, supply any documents they may need to correct the issue.
6. Log Into Your HMRC Account
Access Online: Visit www.gov.uk/personal-tax-account.
View Tax Code Details: Check if the code issued by HMRC matches what’s on your payslip.
Update Personal Information: Ensure all details (e.g., marital status) are accurate.
7. Contact HMRC
Call HMRC: Use the Income Tax helpline at 0300 200 3300.
Explain the Issue: Describe the discrepancy and provide evidence such as payslips or letters.
Request a Correction: If necessary, HMRC will issue a new tax code.
See also the article on Iv paid the wrong tax
By following these steps, you can resolve tax code issues quickly and ensure your tax deductions are accurate. If you encounter complex problems, consider seeking advice from a tax advisor or professional.