You can check your details with HMRC are correct in several ways

Taxpayers are being urged to review their records, as many people have incorrect information registered with HMRC. Consumer website MoneySavingExpert (MSE) has warned that millions of people need to update their details with the tax authority.

In a social media message, the organisation said: “A new tax year means it’s a good time to check your tax code. If it’s wrong, you could be due £1,000s back.” The message highlighted that “millions are wrong each year” and emphasised that verifying your tax code is accurate is your personal responsibility.

This means if you’re in employment, it falls to you to ensure your code is correct, not your employer. The MSE team highlighted a success story of a person who recovered a substantial sum after being on the wrong tax code for years.

£9,400 refund from HMRC

The taxpayer, named Michele, said: “I was being taxed on every penny I earned, without any allowance. I’d previously been self-employed, but stopped trading three years ago and my tax code hadn’t been updated with my employer.

“It took an hour on the phone to HMRC, but I’ve now been refunded £9,400.” Your tax code sets how much tax your employer or pension provider deducts from your income.

You can find yours on a recent payslip or in a Tax Code Notice letter, if HMRC issues one. Each person receives a standard tax-free allowance, entitling them to earn up to £12,570 annually without paying income tax on these earnings.

You could overpay thousands

However, if you’re on an incorrect tax code, there’s a danger this allowance might not be correctly applied to your circumstances. If you’ve missed out on the allowance entirely and pay tax at the basic rate, you could unnecessarily hand over an additional £2,514 annually.

If you were incorrectly taxed in this manner over three tax years, you could wrongly pay an extra £7,542 to HMRC. The tax department said previously: “Anyone who thinks their tax code is incorrect can update their details on our app or via their online tax account, or contact our helpline if unable to go online.” The number to ring is 0300 200 3300.

The most frequently used tax code is 1257L, showing that you qualify for the full £12,570 personal allowance. If HMRC discovers that you’ve overpaid tax, you’ll receive a P800 tax calculation letter.

This will explain how you can reclaim the money. You may be able to do this through the Government website or via the HMRC app.