Money Saving Expert Martin Lewis has issued an urgent call to action for every worker in the UK to scrutinise their payslips immediately. The consumer champion warns that a simple, 60-second check could uncover hundreds of pounds you're owed due to a common tax error.
The culprit? An incorrect tax code, often triggered by a change in employment, a shift to working from home, or a new company benefit. Millions are placed on an 'emergency tax' code by default, which frequently results in significant overpayments to HM Revenue & Customs (HMRC).
Your Quick Checklist to a Potential Windfall
Don't know where to start? Follow this simple guide:
- Locate your tax code: It should be clearly visible on your payslip, usually a letter followed by several numbers (e.g., 1257L).
- Check the code is correct: The standard tax code for most people in the 2024/25 tax year is 1257L. If yours is different, it may be wrong.
- Beware of emergency codes: Look out for codes like '1257W1', '1257M1' or 'BR'. These are emergency or non-cumulative codes that often mean you're not receiving your full tax-free allowance and are paying too much.
How to Claim Your Money Back
The good news is that you don't have to wait until the end of the tax year to get your money back. If you've overpaid, HMRC should automatically issue a refund through your employer, which will appear in your subsequent pay packets.
However, Martin Lewis advises against waiting. If you spot a mistake, you can contact HMRC directly to speed up the process. The refund could amount to a welcome cash injection, with many taxpayers discovering they are owed hundreds of pounds.
This isn't a one-off event. Lewis emphasised that this is a systemic issue, urging everyone to make a habit of checking their tax code with every new job or significant change in circumstances. A moment of vigilance could put a significant sum of your hard-earned money back in your pocket.
