As some of you may be aware, it was recently announced that over one million incorrect tax demands where sent to the UK population, resulting in hundreds of millions of pounds in excess tax being received by the authorities.  While it will take some time, the majority of those who received incorrect tax demands should see their over payments returned, although there are many suffering who have no idea.  Do you know your tax code and what it means?

The UK has a fairly complicated income tax systems which has been in place for many years, and while there have been attempts to simplify the system they have made little real progress.  Depending upon your age, employment record and marital status to name but a few, you will receive a tax code in relation to income tax.  Different tax codes will allocate certain tax allowances and tax rates to your income, with the income tax element collected at source - i.e. through the PAYE (Pay As You Earn) system.

Have you checked your Tax Code?

Do you know what it is and what it should be?

Surprisingly enough, the majority of the UK working population have no idea what their tax code relates to, and even if it is correct.  There are many sites on the internet which will give you the details of each different tax code, and the one which best suits you own situation.  It has be shown that many UK workers have been on the wrong tax code for years, resulting in massive over payment of taxes, often for long periods.

If you are able to prove that you have been overcharged and should have been on a different tax rate, there is every chance that you can reclaim the over payments.  Rather than trivial amounts, any long term over payment could result in the return of thousands of pounds - something which no doubt you could put to better use!

If you are in any doubt about your tax situation, and whether you may have been overcharged, there are masses of accountants online to assist.