HMRC sends customer £2,000 after tax mistake and she warns others to check if you're owed too

A woman has revealed how she unexpectedly received a HMRC cheque for nearly £2,000 when an envelope landed on her doormat. Writing in The Times, Lily Russell-Jones said she got sent the refund because she had paid too much income tax.

"At the time I was so excited to get the money that I did not question why I had overpaid in the first place," she said. It turned out she had been issued with the wrong tax code (you can see your tax code by looking for the series of letters and numbers on your payslip , which is used by HMRC to work out how much tax you owe.

Lily said she had suspected for a while that her take-home pay was too low, but she had assumed she was the one making an error in her calculations. As it turned out, she had been overcharged £177 a month for almost a year, leading to the cheque for £1,940, along with a letter telling her she had paid too much income tax.

It happened because when she started working at The Times her tax code changed to BR (basic rate), which can happen if HMRC doesn't get all the information it needs about your employment or your income. It meant her entire salary was taxed at 20% and she did not get the tax-free personal allowance (see below for more on this).

"My experience is far from unique," she wrote. "A survey of 2,000 people by the insurer Canada Life found that 31 per cent who had checked their tax code found that it was wrong at some point. About 18 per cent of people had never checked."

How to check your tax code

Checking your tax code is important because it makes sure the right amount of tax is being deducted from your income. It is possible that you are paying too much tax! Anyone who is employed under PAYE (pay as you earn), either part-time or full-time, and anyone with a private pension, will have a tax code. Each job and pension will have its own tax code. Unemployed, fully self employed and those only getting a state pension do not have a tax code. It means tax is deducted before you get your wages or pension.

The most common tax code is 1257L (this indicates that you are entitled to the tax-free personal allowance (the amount you can earn each year before paying income tax) of £12,570). You may be entitled to less than this if you earn a lot of money or get workplace benefits like a car. If HMRC does not have enough information about you, it could put you on the BR (basic rate) tax code or issue an emergency tax code (ending in the letters M1, W1 or X). These could all result in you paying too much tax.

Why does a tax code change?

Your tax code could be changed by HMRC if your job or your income changes (eg by switching jobs or getting a pay rise). There could also be an increase in the tax free personal allowance when the government sets its budget.

Where to find your tax code

There are several places you can find your tax code, including:

• Your payslip

• Your personal tax account (which is managed by HMRC and gives you access to your tax code when you want it).

• The HMRC app

• Your P60 (your annual tax summary, from your employer)

• Your P45 (the document received from an employer when you stop working for them)

• Call HMRC (you will need your national insurance number)

• Pension advice slip

• PAYE Coding Notice or Form P2

How do I get a tax rebate if my code is wrong?

If you feel that you need to change or query your tax code you need to contact HMRC. HMRC can amend your tax code if necessary and send your employer a new tax code to use straight away. HMRC have a specific online process to help you with your tax code queries or you can call them on 0300 200 3300.

In cases where your tax code causes you to overpay tax you will receive a tax rebate back from HMRC after the tax code has been changed. A tax rebate can be repaid for the previous four tax years only so if you think you may have had an inaccurate code in previous tax years you should do something about it as soon as you can.