How to Check if Your Tax Code is Wrong

Alan Bermingham

10 Years of Expertise in Fintech Innovation

7 min read

Let’s Get Started

Understanding your tax code might seem confusing at first, but it’s easier than you think, and it can make a big difference to your finances.

A quick check could reveal if you’ve been paying the right amount of tax or even help you claim back money you’re owed. In this guide, we’ll show you how to check your tax code, what it means, and what to do if something doesn’t look right.

Why should you care about your tax code?

Nobody likes paying more tax than they need to. Yet millions of UK taxpayers have incorrect tax codes each year, potentially losing hundreds or even thousands of pounds.

Your tax code determines how much tax HMRC takes from your wages or pension. Your tax code also decides how much income tax is deducted from your pay, so if it’s wrong, you could end up paying too much or too little.

Getting familiar with how to check your tax code takes just a few minutes but could put money back in your pocket. It’s worth the small effort to avoid unnecessary payments.

In this guide, we’ll walk you through checking your tax code, spotting mistakes, and fixing any errors to make sure you’re paying exactly what you should be, no more, no less.

What exactly is a tax code and how do you find yours?

A tax code is a combination of numbers and letters that tells your employer or pension provider how much tax to take from your pay. Think of it as HM Revenue and Customs (HMRC)’s instruction for how much of your money they should keep.

Finding your tax code is simple. The easiest place to look is on your payslip, usually printed near your National Insurance number. You can also find it on official documents from HM Revenue and Customs, such as your P60 or your coding notice, which will display your tax code. Additionally, you can check your tax code using the HMRC app or the 'Check your Income Tax online service' provided by HM Revenue and Customs.

If you’ve changed jobs recently, check your P45. This shows the tax code your previous employer was using. You can also see your tax code by logging into your personal tax account on the HMRC website, where you may need to sign in using your Government Gateway credentials.

Can’t find your code anywhere? You can always call HM Revenue and Customs directly on 0300 200 3300. Have your National Insurance number ready when you call.

What do all those numbers and letters in your tax code actually mean?

Tax codes might look like random characters, but each part has a specific meaning. The numbers typically represent your tax-free allowance divided by 10. Allowances determine how much of your income is tax-free, and these are reflected in your tax code. So if you see 1257, that means you can earn £12,570 before paying any tax. HMRC uses specific calculations to work out your tax code based on your allowances, income, and circumstances.

The letter part of your tax code is known as the tax code letters. These letters tell HMRC and your employer about your situation. For example, L means you are entitled to the standard personal allowance, BR means all your income from this job is taxed at the basic rate with no tax-free amount, and NT means you pay no tax on this income.

K means you have income that isn’t being taxed another way, or you get taxable benefits worth more than your personal allowance. If you see ‘W1’ or ‘M1’ at the end, that’s an emergency tax code only meant to be temporary. If your tax code starts with ‘S’, it means you are taxed under the Scotland system, which has different rates and allowances.

The most common tax code for 2024/25 is 1257L, which is the common tax code indicating you are entitled to the full standard personal allowance. This tax code mean you can earn up to £12,570 tax-free, and it helps determine how much tax is deducted from your income. To understand what your tax code means, you can use the tax code checker on GOV.UK to see how your code affects your tax deductions.

How can you tell if your tax code is wrong?

Start by checking if the number in your tax code matches your personal allowance (divided by 10). For most people in 2024/25, this should be 1257. Make sure to check the date on your tax code notice to ensure the information is current. Has your situation changed recently? Any changes in jobs, benefits, or additional income sources should be reflected in your tax code.

Are you still on an emergency tax code (ending in W1/M1) months after starting a new job? This could mean you’re paying too much tax.Do you have multiple jobs or pensions? Each should have the right tax code to prevent over or underpayment, especially when declaring multiple income streams on Self Assessment.

Have you received tax-free benefits or claimed tax-deductible expenses? These should be factored into your code. A suddenly different tax code without any changes in your circumstances could be a red flag worth investigating.

What should you do if you spot a mistake in your tax code?

Don’t worry - fixing a wrong tax code is straightforward. Contact HMRC directly using the income tax helpline: 0300 200 3300. Have your National Insurance number and tax reference ready when you call.

You can also use the Check your Income Tax online service on the GOV UK website to query or correct your tax code. This service sometimes gets faster results than calling. Be ready to explain why you think your code is wrong and provide supporting evidence, including whether you are claiming any available tax allowances or deductions.

If HMRC requests more information, you may need to fill in the necessary forms or complete an online assessment to update your details.

If the issue isn’t sorted quickly, follow up with a letter or message through your online account. Once HMRC agrees your code is wrong, they’ll update it and inform your employer. Any overpaid tax is normally refunded through an adjustment to your future tax code.

How far back can you claim for tax code mistakes?

Good news, you can typically claim back overpaid tax for the current tax year plus the previous four tax years. That’s potentially five years of tax refunds if your code has been wrong for a while, allowing you to receive a refund or tax refund for any tax you have paid in excess.

The deadline for reclaiming overpaid tax is four years from the end of the tax year in which you paid too much. So for the 2020/21 tax year, you have until 5 April 2025 to claim your refund. Keep any evidence showing when the error occurred to make the tax refund claim process smoother.

Remember that tax code errors can work both ways, sometimes you might have paid too little and underpaid, while others discover they have overpaid National Insurance and need their money back.In this case, HMRC can also go back several years to collect what you owe in underpaid tax, though they may limit this if the error was entirely their fault.

Why is it important to check your tax code regularly?

Your tax code isn’t set in stone, it can change whenever your circumstances do. Getting into the habit of checking it a few times a year could save you money, particularly when learning how to prepare for tax year end with a simple guide. Many people assume HMRC always gets things right, but their systems aren’t always accurate.

If you think your tax code is wrong, use HMRC's online services to check and update it, or contact HMRC directly to resolve any issues.

The responsibility for paying the correct amount of tax ultimately falls on you, not HMRC or your employer. This might seem unfair, but checking your tax code takes just a few minutes and could save you hundreds of pounds.

Final Thoughts

Checking your tax code regularly is a small habit that could make a big difference to your finances. Don't assume everything is correct - take a few minutes to verify your details and query any discrepancies.

If you find an error, act quickly to get it fixed. HMRC is generally helpful when addressing genuine mistakes, and the process is simpler than most people expect. Remember that tax is your responsibility, even when mistakes aren't your fault.

Take five minutes today to check your tax code - your bank balance might thank you later. And if you need help managing your tax affairs more completely, Pie tax offers the straightforward solution you've been looking for.