The vital check that could save you thousands in tax: Our essential guide to the bewildering tax codes landing on your doormat

August 4, 2016 | 6years | NEWS AND INTEREST

More than one million of us could be paying the wrong amount of tax

It is essential to check your tax code or you could end up out of pocket

New rules on savings interest have plunged thousands into tax code chaos


Every year the taxman sends out 20 million tax codes. They are made up of numbers and letters and while they look dull and harmless, they can mean you pay too little or too much tax.

It is essential to check your tax code is correct — if not, you could end up hundreds of pounds out of pocket or receive a nasty bill in the future.

Your tax code sets out how much of your income you will be taxed on. And you — not HM Revenue & Customs (HMRC) — are responsible if it is wrong.

Worryingly, a government report from the National Audit Office in May showed more than one million of us could be paying the wrong amount of tax.

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