Martin Lewis has issued a warning to all workers in the UK to check their payslips carefully for an 'X' symbol.
The money saving expert appeared on his live ITV programme, answering questions from the public about their finances. One woman, Tina, called in because she'd been charged too much tax and was worried about how she'd make ends meet.
She had been taxed over £800 for a month's work on a 16 hour contract, but had been picking up lots of overtime. The concerned caller added: “My tax code is now back to 1257L, but I’m short £500, worrying about money. Will I get a tax rebate?”
Liverpool Echo reports that tax expert Rebecca Benneyworth was able to answer her question.
She said: "It depends whether she’s on a Month One tax code or not. Month One is often referred to as Emergency Code. If she is, she needs to sort that with HMRC, either by phoning them or by going into her personal tax account through the HMRC app."
If you think you've been emergency taxed, Rebecca said all you need to do is check your payslip.
She said: “On her tax code, she’ll have 1257L. If she’s got an ‘X’ on the end (1257LX), she’s on Month One.
“Otherwise, if it’s not got an ‘X’ on the end, it should come back in her next pay packet. If it doesn’t, speak to your employer.”
This is often the case when HMRC doesn't know how much tax you need to pay, and it usually happens when you first start a new job. You may also see 1257 W1 or 1257 M1 on your pay slips, if you're on emergency tax.
Martin Lewis echoed this, saying: "If you’ve got the wrong tax code, go to HMRC. If you’re not getting the tax back, go and talk politely to your employer. Many payroll departments are actually pretty helpful if you’re struggling with this."
He added: "Each year, you’re sent your tax code if you’re an employee. The standard one is 1257L. What that actually means is £12,570 - which is how much you can earn tax free each year.
“Millions of people are on the wrong tax code. Some are overpaying and are therefore due thousands of pounds back. Some are underpaying and are therefore going to get a shock as they’re asked for more money.
"So it’s really important, because it's your legal responsibility - not HMRC, not your employer - to check your tax code."
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