Are you paying the right amount of Tax? (1)

It’s dull, and difficult to understand, but checking your tax coding and ensuring that HMRC take the correct tax is important says Brearley & Co Tax Manager, Andrew Cowe.

“We’ve had people contacting us now the new tax year has begun, asking why they are being deducted more tax”, said Andrew.  “The answer lies in the coding notification HMRC sent out in January or February.   You should check this when it comes through, querying anything that looks wrong.  By their own admission they frequently issue incorrect codes”.

“If your code is too high they’ll take less tax throughout the year.  Great, until HMRC ‘catches up’ and sends a bill for the shortfall, which you’ll have to pay even though it’s their fault”.

“If the code is too low, HMRC take too much.  Whilst you can reclaim that, this involves contacting them, which is a frustrating process, and although it is nice to get a repayment, you only get back what you shouldn’t have paid anyway”.

“Errors can still be put right, as long it’s done by the end of the tax year things should correct automatically.  The sooner you act the better.”

Andrew Cowe, Tax Manager, Brearley & Co