‘It’s complex!’ Martin Lewis unpacks what your tax code means – check if yours is correct

4 mins read


Appearing on BBC Radio 5Live alongside presenter Nihal Arthanayake, the Money Saving Expert addressed financial questions which have stumped the show’s listenership. One such question related to tax codes, a key set of numbers which help people get their taxes sorted out. 

A listener, Charlotte Pocket, wrote in to Martin and Nihal, and said: “Every year I get three or more letters with different tax codes, each saying I owe a certain amount of money. The amount changes with each letter. 

“I do not understand! No matter where I look. I know tax codes are my responsibility.

“But if HMRC doesn’t seem to understand what tax code I’m on, how on earth am I expected to know?”

Martin highlighted that each year millions of tax codes are wrong, but it is the responsibility of Britons to check this.

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For example, the letter L states a person is entitled to the standard tax-free Personal Allowance, according to the Government’s website. 

However, for those who are confused, Martin suggested this may need to be looked into further. 

He continued: “There are tax code calculators online which may try to translate what your tax code is. 

“But ultimately, tax codes are pretty complex, and if you can’t understand it, I’m afraid that’s why we have lots of accountants in jobs across the country.

“It is their job to do it and to sort it out for you. 

“If it is a problem, then you may need to employ a professional to try to sort it out.”

In most cases, HMRC will automatically update a tax code if a person’s income changes.

This information is usually provided by a person’s employer, for example, if they start a new job.

However, if HMRC does have the wrong information about someone’s income, it could result in an incorrect tax code.

For this reason, it is important Britons check the Revenue has up-to-date details about their income situation.

Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip

Nihal Arthanayake’s BBC Radio 5Live show is broadcast Monday to Thursday from 1pm to 4pm.


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