Martin Lewis, founder of Money Saving Expert, has issued an urgent warning for UK workers earning more than £12,570 to check their tax codes, stating that errors could cost thousands of pounds. Speaking on his BBC Sounds podcast, Lewis emphasised that millions of tax codes are incorrect each year and that it is the individual's responsibility to ensure accuracy.
A tax code, comprising numbers and letters, tells employers or pension providers how much income tax to deduct. The standard code 1257L corresponds to the personal allowance of £12,570 for the 2025/26 tax year. Earnings above this threshold are taxed at 20% for basic rate taxpayers, with higher rates for incomes over £50,270.
Lewis warned that incorrect codes could lead to overpaying tax or underpaying, which may result in unexpected tax bills. “It could mean you're paying far too much tax each year,” he said, adding that underpayment could lead to a “big tax bill” later. He urged listeners to use free online tax code calculators to verify their codes.
Tax codes can change due to life events such as starting a new job, receiving benefits, or using Marriage Allowance. Workers can find their code on payslips, HMRC letters, or via their Personal Tax Account on GOV.UK. Lewis stressed that checking codes annually is essential to avoid financial surprises.
