Struggling to understand what your tax code means? Have you ever understood your tax code? Do you know what a tax code is?
HMRC have released a new online tool to help taxpayers understand what their tax code means. The online tool is designed to help, assist and explain your tax code and why your tax code may have changed.
There are many different reasons why HMRC may change your tax code. This may be because you have started receiving (or have changed) taxable company benefits, you may have started receiving more than one source of income, or you may be underpaying in tax for the tax year in question. There may be other reasons, but these will generally be on the back of your employer’s PAYE submissions into HMRC.
To make sure you are using the tool correctly, you will need a note of your new tax code and an estimate of your annual income. Depending on your circumstances, you may also need details of any taxable benefits being provided by your employer, or state pension amount.
It is always important to check each pay slip to ensure the correct tax code is being applied, which will have an impact on the amount of income tax you are paying at source.
The online tool can be found using this link: HMRC Online Tax Code Checker.
If you would like to discuss the tool in more detail or your tax affairs in general, please contact your usual NRB advisor or our tax team.
Other Useful Links Tax Code Overview: Tax codes: Overview – GOV.UK (www.gov.uk)