Workers urged to check tax codes following 'costly mistake'

The government has urged millions of UK workers to check their tax codes following a 'costly mistake' which could result in lower salaries.The caution comes in the wake of incidents where workers have inadvertently paid too much tax on their earnings, despite not being at fault.

Errors in relation to HMRC tax codes mean that some workers may have paid too much tax on their earnings. Experts have warned that some employees may have already received less than they're entitled to as a result of the error.

Incorrect salary deductions could also reduce a worker's disposable income, experts said, and therefore affect an individual's ability to save or cover regular expenses.

Why is it important to check your tax code?

Your tax code is calculated by HMRC, and it's based on the information they have about your income and circumstances. However, HMRC doesn't always get it right, and mistakes can happen. For example, if you have more than one job or income source, you may have been allocated the wrong tax code. Similarly, if you've recently changed jobs or started receiving benefits, your tax code may need to be updated to reflect this.

If your tax code is incorrect, it can have serious consequences. A wrong tax code could [also] mean you're underpaying tax, leading to a surprise bill from HMRC later, possibly with interest and penalties.'

How to notify HMRC if you need to make changes to your tax code.

The easiest way to notify HMRC is by signing into your government gateway account, if you haven’t already set up an account you can do so here.

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