Martin Lewis podcast expert issues tax code warning and says 'you need to sort it out'

Martin Lewis, alongside tax expert Rebecca Benneyworth, addressed listeners' pressing tax queries on The Martin Lewis Podcast on Monday. A listener wrote in to the BBC show asking: "I have two jobs, one main job and one agency, yet I have the same tax code 1269L: why?"

In a straightforward response, Rebecca stated: "Because they're wrong...The fact they're both the same tells me they're wrong," while Martin pointed out that "millions" of people are assigned the incorrect tax code.

She elaborated: "If at your main job, you're earning more than £12,570, then you've got no allowances left for the other job so you'll have a different tax code." Rebecca advised the caller, Stephen, to rectify this issue promptly, cautioning him that he's currently "seriously underpaying tax" and that it would eventually "come home to roost".

There are several ways a tax code can be incorrect due to mistakes by HMRC, an employer or the employee themselves, reports the Express. Rebecca suggested that in Stephen's case, the likely scenario was a misunderstanding between him or the agency: "When you get your agency job you will have been given a starter form and can tick a box on what your circumstances are."

"One of the boxes will say 'this is my main job' or 'this is my only job' and that helps HMRC get your tax code right. When the payroll gets filed to HMRC they'll send the tax code back to your employer. You really do need to sort it out," she added, expressing concern.

The "tax deity" Rebecca pointed out that the common tax code for most individuals is likely to be 1257L, which indicates the amount of income one can earn before being taxed each year. The sum of £12,570 represents the standard personal allowance everyone is entitled to, and Rebecca clarified: "How they get the tax code is just chop the last number off, nothing scientific about it."

She also mentioned that some might have "bigger tax codes", any figure above 1257, signifying a higher tax-free allowance. This increase could be due to factors such as relief on pension contributions or claiming expenses for things like washing work uniforms.

Conversely, those with a tax code below 1257 might be in the process of paying off an outstanding tax bill, which reduces their tax-free allowance.