Check tax codes to reclaim overpaid taxes

Martin Lewis, the Money Saving Expert, is warning people to check their tax codes before the end of the tax year. He shared this advice during his show, The Martin Lewis Money Show Live, on Tuesday night. With changes to benefits and personal finances coming soon, he emphasized the need to ensure tax codes are correct to avoid losing money. Tax codes are important because they tell employers and pension providers how much tax to deduct. Lewis explained that many people could have incorrect tax codes. He urged viewers to verify not only their current code but also if it was correct for the 2020/2021 tax year. The common tax code in the UK, such as 1275L, indicates a tax-free allowance of £12,750 annually. Lewis stressed that individuals are responsible for checking their tax codes, not HMRC or employers. He mentioned that millions of tax codes are wrong, so it’s essential for taxpayers to take action. The deadline for reclaiming tax overpayments from the 2020/2021 tax year is approaching quickly, and Lewis warned that people may have overpaid hundreds or thousands of pounds. He advised viewers to use a tax code calculator online to help clarify their codes. Unlike underpayments, which the government can pursue for a longer time, the window for addressing overpayments is short. If there are mistakes, taxpayers will still need to pay any outstanding tax debt.