How To Tell If You Are on the Right Tax Code

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If you are earning money through employment, then you will be paying tax through your employer.

This means that tax will be deducted before it is paid to you. This makes things very straightforward for you, meaning that you do not have to worry about paying it.

However, it is wise not to just take things in your stride. There are people out there who are not paying the right amount of tax because they are on the wrong tax code. It is therefore important to find out if yours is correct.

You may not even be aware of what your tax code is. It will be written on your payslip and is usually some numbers and a letter. This is your personal allowance and it will change depending on how much you are earning. That means that as you earn more, you may have to pay more tax, depending on what band you are in. There are also emergency tax codes, which you get put on when you first start a new job and these are normally higher than you should be on.

Therefore it is important to make sure that you are being charged tax at the right amount. You want to make sure that your code is right. There are tax calculators, where you can find out how much you should be paying and this might help you to calculate if you are paying the right amount. You can also speak to a tax advisor to see whether the amount that you are paying is correct, but this is likely to cost you money. It could be better to get in touch with the Citizens advice Bureau or your local Inland Revenue office.

Even if you have always had the same tax code, do not assume that this means that it has to be correct. It is wise to check and be sure as it could mean that you are missing out on a chunk of money that is yours. It is always worth taking a few minutes to check things like this out as it could make a significant difference to your finances and in these tough economic times, we could all do with some extra money coming in.

It is also worth checking the amount of tax you are paying when you are self employed or earning through other means. It is possible for tax amounts to be calculated wringly, so make sure that yours has been done correctly.