Tips on how to find out if you are on the correct tax code

Switching jobs or having more than one job at a time can result in you paying more income tax than you are supposed to. Wether you are employed or work as a contractor there is a limt to the national insurance contributions you need to pay.

Reasons why you might have overpaid tax.

If your earnings per week for the 2010-11 tax period where over £844 per week.
Changed from being self-employed but continued paying Class 2 National Insurance
When after reaching pension age your employer contiued deducting Class 1 tax.
If you left the UK at the end of the tax year.
Being on th wrong tax code.
you're a student who only worked at holiday times and didn't complete form P38S Student Employees


Close to 4 million employees and pensioners are due a tax rebate whilst a quarter of this figure need to pay more. Reasons being - a mix up of tax codes over the past 2 years.

Guide to claiming over paid tax

Know your code.This can usually be found on your P45 and its imperative that you give it to your employer every time you change jobs. This code can also be found on your PAYE coding notice. The code can be a series of numbers of letters e.g. K497 or 117L

 Use a tax refund calculator

There are several tax refund calculators that are available which can give you an almost exact estimate of how much tax you need to pay. some have even added functionality that allows you to calculate several other taxes. Try this tax refund calculator.

Could that be the wrong tax code?

Once you know your tax code you now have a rough idea of how much tax you need to pay based on your age, income etc. If you have the slightest hint that you are on the wrong code chances are you are probably right.

No need to ring the alarm. Do not worry if you have overpaid tax, you can always get it back. If you have underpaid well, a man's got to do what a man's got to- pay it back. You will be relieved to know that not only where debtors prisoners abolished but you also get to pay it back over a period of time.

Tax codes will help you determine whether you have underpaid or overpaid.

Now that you know your tax code the next thing you need to do is either 

a) Get back your overpaid tax, in the case that you are on the wrong tax code and have overpaid. You can do this by filling an online tax rebate form. 

b)Watch the postman- if you have underpaid don't worry the responsible authority will gladly inform you in due course.

Watch you future tax code.

Every time anything to do with your finances changes e.g. changing jobs its worth your while to check into the HMRC to ensure that you are on the right tax code.