The code on your payslip that could mean you’ve overpaid hundreds of pounds in tax
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CHECKING a five-digit code could signal that you've overpaid hundreds of pounds in tax and are due are rebate. Tax codes dictate how much is deducted from your pay, and if you've been placed on the wrong one you could be paying the incorrect amount. The codes can be found on your payslip and it's important to make sure you've been placed in the right band.
![[HMRC tax letter.]](https://www.thesun.co.uk/wp-content/uploads/2024/12/huntingdonmarch2022220220414hmrevenuetaxreturnreminder-04055-JS939826536.jpg?strip=all&w=960)
If your payslip shows the code for the wrong band and you have overpaid tax you can apply for the money to be paid back. But, the wrong code could also mean you've paid too little in tax and could end up owing money to HMRC. It's particularly important to be vigilant when it comes to your tax code as it's your responsibility to let HMRC know if it's wrong.
Your tax code denotes the tax-free personal allowance you're entitled to, so the wrong code could mean you're being taxed on earnings you shouldn't be. It's easy to find your tax code on your payslip. It is normally a five-digit mixture of letters and numbers.
The most common tax code is 1257L, which signifies that you're entitled to the standard tax-free allowance of £12,570. Factors that could mean you're not entitled to the standard allowance include receiving employee benefits such as medical insurance, having second jobs or pensions or using schemes such as the marriage allowance.
If you think you're tax code is wrong you can claim back tax you've overpaid in the past four years. Here's how to check your tax code and what to do if it's wrong. You can find your tax code either on your payslip or by logging into your personal tax account online or via the HMRC app.
