HMRC warning to anyone moving house or changing jobs

Brits have been warned they could potentially be paying too much or too little in tax. This is more likely to be the case if there has recently been a big life event, such as moving house, changing job or getting married.

This is when HMRC mistakes are more likely to occur, experts have warned. People have been told it's worth checking your tax codes on payslips every so often to make sure they are correct.

The standard tax code for most workers is 1257L. In most cases, this is what will be shown on payslips.

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Others could include BR, for those taxed at the basic rate (20%), and D0, for those taxed at the higher rate (40%). Sophie Rhone from Digital PR Lab, said: "Navigating the intricacies of tax codes can be a daunting task for many employees. Your tax code determines how much income tax is deducted from your salary, and even a minor error could leave you paying more than your fair share - or not enough, leading to unexpected tax bills later on.

"A tax code is a combination of letters and numbers that represents the amount of tax-free income you're entitled to in a tax year. For instance, the code "1257L" for the 2023-24 tax year means you have a Personal Allowance of £12,570 before paying tax on the remaining income.

"Your tax code is usually indicated on your payslip. Compare it to the code you were given at the start of the tax year or when you changed jobs."

Common reasons for incorrect tax codes include

  • Multiple Jobs/Pensions: Having multiple sources of income may lead to tax miscalculations if HMRC doesn't allocate the correct allowances across them

  • Employer Mistakes: Employers might accidentally report incorrect data to HMRC, resulting in inaccurate codes

  • Life Changes: Getting married, moving house, or changing jobs can affect your tax status. Inform HMRC promptly to avoid coding errors

  • Benefits in Kind: If you receive non-cash benefits like a company car, they should be included in your tax code. Failure to account for them can lead to under- or overpayment