A Martin Lewis expert said “millions” could be paying the wrong tax amount this year in his latest Martin Lewis Podcast
The latest Martin Lewis podcast has issued a warning that millions of Brits could be paying the wrong amount in tax. The money guru’s pod made the warning as he took to the air for the latest The Martin Lewis Podcast on Monday.
He appeared with tax expert Rebecca Benneyworth. One fan wrote into the BBC podcast, saying: “I have 2 jobs, one main job and one agency yet I have the same tax code 1269L, why?”
Rebecca said: “Because they’re wrong…The fact they’re both the same tells me they’re wrong. If at your main job you’re earning more than £12,570 then you’ve got no allowances left for the other job so you’ll have a different tax code.”
Rebecca told the caller, Stephen, to get the issue solved as soon as possible. She told him he’s currently “seriously underpaying tax”.
In addition, she said it would “come home to roost”, Further to that, she explained that there are multiple ways a tax code can be mistaken through errors by the HMRC, a person’s employer or the employee themselves.
Rebecca explained the likely situation in Stephen’s case was an issue between him or the agency: “When you get your agency job you will have a been given a starter form and can tick a box on what your circumstances are.
“One of the boxes will say ‘this is my main job’ or ‘this is my only job’ and that helps HMRC get your tax code right. When the payroll gets filed to HMRC they’ll send the tax code back to your employer. You really do need to sort it out,” she added with a touch of concern in her voice.
She said most people’s tax code will be 1257L. This explains the allowance of income they receive tax-free each tax year, which is £12,570 for most people. She said: “Generally speaking your tax code will be 1257L which is a basic personal allowance. How they get the tax code is just chop the last number off, nothing scientific about it.” Some people may have “bigger tax codes”, any numbers over 1257, which means they are receiving more tax-free allowance.
Rebecca said: “They might have put more money into a pension last year, if you’re a high rate taxpayer, and HMRC will assume you’re going to carry on putting money in, so (HMRC will say) ‘Here’s an extra bit of relief on that’. It might be you’re a nurse and you’ve claimed to launder a uniform.” Those that have a tax code less than 1257 may find they are paying off a previous tax bill that is eating into their tax-free allowance.
