The vast majority of the taxpaying public are employees who pay tax through the ‘Pay as you earn’ system administered by the employer. Because of this most employees have very little involvement with HM Revenue & Customs – trusting both HMRC and their employer to ‘get it right’.
But, this system is not perfect.
How do I check I am not paying too much tax
The simplest method is the check your PAYE code which can be found on your payslip. This is either a letter (L,P, Y, T or K) and 3 digits or in special cases NT, BR or D0.
If you have only one employment this tax year this code is normally 647L – if your code is different HMRC have adjusted your tax for additional allowances or to tax you on benefits or other income. If this is the case you should review your code more carefully to ensure these adjustments are correct. Remember, most employers will not do this for you and will simply apply the code they are given by HMRC.
If you have more than one employment the chance of an error increases significantly as adjustments for allowances, benefits or other income are split between each job.
If you believe your code may be incorrect Hooper & Co will be happy to review this for you, simply contact Jamie Hooper for more information.