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Are you paying too much tax?

November 17, 2011 11:23

ByMartin Lewis, Martin Lewis

2 min read

Hundreds of thousands of people may miss out on tax refunds if they are not careful. Six million new refunds were recently discovered by the Revenue during an annual check. Yet underpayments were also found meaning you may owe more. Here are ten things you need to know:

● A ten-second tax code guide

Tax codes have a critical impact on your finances as they tell employers how much tax to deduct. Take the most common 747L code. Add a five to the end of the numbers to discover what you can earn before income tax is taken.

In this case it is £7,475. Even small errors can lead to mistakes of £100s, so this really does matter. You will find your code listed on your 'coding notice', payslip or P45. Each income source will have different tax codes.