Tax code news — Check if you can claim £689 and avoid waiting weeks for HMRC letter as national insurance cut kicks in
BRITS could be missing out on hundreds of pounds of cash - you need to check your tax code now to see if you’re eligible.
A third of adults have been on the wrong tax code at some point, with the average worker paying £689 more than they need, according to a survey by Canada Life.
HMRC sends out letters to inform workers on PAYE of their tax code in March and April - but you don’t need to wait to check.
You can check your tax code on your payslip. We explain how to check if you’re on the wrong one - and how to fix it.
If you're on the wrong code you can contact HMRC on 0300 200 3300.
Read our live blog below for the latest news and updates...
Housing benefit increases - explained
Along with a slew of other government payments, housing benefit increased this week.
Here is how you can expect it to rise for you:
Single person:
- Aged under 25: Increases from £67.20 to £71.70
- Any age and on main phase ESA: Increases from £84.80 to £90.50
- Aged between 25 and state pension credit age: Increases from £84.80 to £90.50
- Has reached pension age: Increases from £217 to £235.20
Lone parent:
- Aged under 18: Increases from £67.20 to £71.70
- Any age and on main phase ESA: Increases from £84.80 to £90.50
- Aged between 18 and state pension credit age: Increases from £84.80 to £90.50
- Has reached state pension age: Increases from £217 to £235.20
Couple:
- Both aged under 18: Increases from £101.50 to £108.30
- One or both aged between 18 and state pension credit age: Increases from £133.30 to £142.25
- Any age and on main phase ESA: Increases from £133.30 to £142.25
- One or both have reached pension age: Increases from £324.70 to £352
Will I get an automatic tax refund if I have paid too much tax?
If you’ve paid too much tax you should be eligible for a refund.
The way you will be refunded depends on when you made the overpayment, and if it was in a current or previous job.
For example, if you’ve overpaid in your current job after April 6 2022, you will get the payback in your salary.
To do this, you will have to check if you’re on the wrong tax code and, if so, ask HMRC to correct it.
How much did the state pension rise?
Pensioners on the new state pension will now receive £901 a year following yesterday's boost.
This is up from just over £10,600 to £11,501 a year and a weekly rise from £203.85 to £221.20 - a £17.35 increase.
However, this only applies to those who are entitled to a "full" new state pension.
Older pensioners who retired before April 2016 will get a weekly rise from £156.20 to £169.48, and an annual rise from £8,122.40 to £8,812.96.
Beloved fashion brand to shut 15 stores in days
Ted Baker has announced plans to close 11 of its stores across the country next week.
This comes after four branches had already confirmed plans to shut as the business fell into administration.
This is the full list of branches closing within days:
- Birmingham Bullring
- Bristol
- Bromley
- Cambridge
- Exeter
- Leeds
- Liverpool One
- London Bridge
- Milton Keynes
- Nottingham
- Oxford
- Bicester (notice served before administration)
- Brompton Road, London (notice served before administration)
- Floral Street, London (notice served before administration)
- Manchester Trafford (notice served before administration)
Credit: Getty Which benefits are going up by 6.7%?
The list of benefits going up by 6.7% from April includes:
- Universal Credit
- Child benefit
- Contributory employment and support allowance
- Contributory jobseeker’s allowance
- Statutory maternity/paternity pay and maternity allowance
- Income-based jobseeker’s allowance (JSA)
- Income-related employment and support allowance (ESA)
- Income support
- Working tax credit
- Child tax credit
11 income tax tips and tricks
Martin Lewis has revealed an from moneysavingexpert.com that Brits can use to see how National Insurance will affect them this year along with 11 tips to make it all smoother.
- Check your tax code – you may be owed £1,000s: free tax code calculator
- Transfer unused allowance to your spouse: marriage tax allowance
- Reduce tax if you wear/wore a uniform: uniform tax rebate
- Up to £2,000/yr free per child to help with childcare costs: tax-free childcare
- Take home over £500/mth? Earn £100+ switching bank: top bank accounts
- Save for pension from pre-tax income: pension need-to-knows
- Earn under £18,500/yr? Pay no savings tax: special savings allowance
- Earn over £18,500/yr? Save tax-free in an ISA: top cash ISAs
- After-tax income impacts mortgage availability: ultimate mortgage calculator
- Ensure you spend less than you earn: free budget planner
- Cut your bills without cutting back: free money makeover
NI cuts could be cancelled out by ‘hidden’ tax rise
While millions will be making savings from the recent National Insurance (NI) cuts, frozen income tax bands mean many are paying more in income tax.
Income thresholds for different bands of tax would normally go up in line with prices at the start of April, but government policy means this has not happened since 2021.
With the personal allowance to pay income tax set at £12,570 until 2028, pay increases could lead to many paying more in tax.
Free debt advice
If you’re in debt there are plenty of services you can take advantage of and they offer free advice on how to manage debt.
Most of them can offer you free guidance and help in person, over the telephone or online.
- – 0800 138 7777
- – 0808 800 9060
- – 0800 138 1111
- – 0808 808 4000
Will all benefits rise?
Because those on other benefits don’t enjoy the triple lock, their increases are limited to 6.7 per cent this year.
Universal credit, claimed by about 6 million people in the UK, is the big beast of the benefits world and is given to workers on low incomes as well as those who are out of work.
For single people, the basic UC payments rise to £311.68 a month (up from £292.11) for the under-25s. For those 25 or over it is now worth £393.45/month (up from £368.74).
How much is the state pension rising by and why?
The state pension is rising by 8.5 per cent from today – a significantly bigger percentage increase that paid to benefits claimants – because of the “triple lock”, which was first introduced by the coalition government and came into force in 2011-12.
It promises to increase the state pension every April in line with either the previous September’s consumer prices index measure of inflation (CPI), the amount that wages increased by, or 2.5 per cent – whichever is the higher figure. For 2024-25, the rise will be in line with the amount wages rose by, meaning pensioners get an extra 8.5 per cent.
What tax relief can you claim?
There are certain things that you can claim tax on under HMRC rules.
These include:
- Expenses for working from home
- Repairing or replacing small tools needed to do their job (for example, scissors or an electric drill)
- Cleaning, repairing or replacing specialist clothing (for example, a branded uniform or safety boots)
- Business mileage (not commuting)
- Travel and overnight expenses
- Professional fees and subscriptions
11 income tax tips and tricks
Martin Lewis has revealed an from moneysavingexpert.com that Brits can use to see how National Insurance will affect them this year along with 11 tips to make it all smoother.
- Check your tax code – you may be owed £1,000s: free tax code calculator
- Transfer unused allowance to your spouse: marriage tax allowance
- Reduce tax if you wear/wore a uniform: uniform tax rebate
- Up to £2,000/yr free per child to help with childcare costs: tax-free childcare
- Take home over £500/mth? Earn £100+ switching bank: top bank accounts
- Save for pension from pre-tax income: pension need-to-knows
- Earn under £18,500/yr? Pay no savings tax: special savings allowance
- Earn over £18,500/yr? Save tax-free in an ISA: top cash ISAs
- After-tax income impacts mortgage availability: ultimate mortgage calculator
- Ensure you spend less than you earn: free budget planner
- Cut your bills without cutting back: free money makeover
NI cuts could be cancelled out by ‘hidden’ tax rise
While millions will be making savings from the recent National Insurance (NI) cuts, frozen income tax bands mean many are paying more in income tax.
Income thresholds for different bands of tax would normally go up in line with prices at the start of April, but Government policy means this has not happened since 2021.
With the personal allowance to pay income tax set at £12,570 until 2028, pay increases could lead to many paying more in tax.
Will I get an automatic tax refund if I have paid too much tax?
If you’ve paid too much tax you should be eligible to get a refund.
The way you will be refunded depends on when you made the overpayment, and if it was in a current or previous job.
For example, if you’ve overpaid in your current job after April 6 2022, you will get the pay back in your salary.
To do this, you will have to check if you’re on the wrong tax code and, if so, ask HMRC to correct it.
Free debt advice
If you’re in debt there are plenty of services you can take advantage of and they offer free advice on how to manage debt.
Most of them can offer you free guidance and help in person, over the telephone or online.
- – 0800 138 7777
- – 0808 800 9060
- – 0800 138 1111
- – 0808 808 4000
Will all benefits rise?
Because those on other benefits don’t enjoy the triple lock, their increases are limited to 6.7 per cent this year.
Universal credit, claimed by about 6 million people in the UK, is the big beast of the benefits world and is given to workers on low incomes as well as those who are out of work.
For single people, the basic UC payments rise to £311.68 a month (up from £292.11) for the under-25s. For those 25 or over it is now worth £393.45/month (up from £368.74).
How much is the state pension rising by and why?
The state pension is rising by 8.5 per cent from today – a significantly bigger percentage increase that paid to benefits claimants – because of the “triple lock”, which was first introduced by the coalition government and came into force in 2011-12.
It promises to increase the state pension every April in line with either the previous September’s consumer prices index measure of inflation (CPI), the amount that wages increased by, or 2.5 per cent – whichever is the higher figure. For 2024-25, the rise will be in line with the amount wages rose by, meaning pensioners get an extra 8.5 per cent.
TSB’s advice for boosting your finances
TSB Bank has shared some advice for boosting your finances as the cost of living continues to rise.
- Contact your bank: Speaking to your bank does not affect your credit rating and can be the first step to finding a better solution and getting financial help.
- Check for unclaimed grants: Lightning Reach and other benefit calculators can make sure you’re not missing out on money you’re entitled to.
- Set your budget: Rising bills and prices mean it’s important to know how much money is coming in and going out, so you don’t overspend.
- Look for where you can make savings: Use your banking app to cancel outgoings like Direct Debits and subscriptions you no longer need.
Who receives the state pension and when?
State pensions are paid every four weeks to people who have reached the qualifying age and have paid enough national insurance contributions.
The new flat-rate state pension (for those who reached state pension age after April 2016) rises from £203.85 to £221.20 a week – or £11,500 a year.
The old basic state pension paid to those who reached state pension age before April 2016 rises from £156.20 a week to £169.50 a week – equivalent to a more than £600 annual increase to £8,814.
What are some of the different tax codes?
- BR – Normally used where people have a second job or pension – all income gets taxed at the basic rate
- D0 – For people with multiple incomes who earn over £50,270. All your income for this job or pension will be taxed at the higher rate of 40 per cent.
- D1 – For people on megabucks with gross earnings of more than £125,140 across different jobs and pensions. This code means you’ll be taxed at 45 per cent on this job.
- K – You owe tax – either from a previous year or you have taxable benefits – and HMRC are getting you to pay up by taking what’s owed through your salary. The K is usually placed in front of the tax code number, rather than after it.
- L – Most people are on the L code, which means you are entitled to the standard tax-free personal allowance of £12,570.
- M – Stands for “marriage”. It means you can pay less tax because your spouse or civil partner has transferred 10 per cent (currently £1,260) of their personal allowance to you
Government’s ‘long-term ambition’ to scrap National Insurance
Chancellor Jeremy Hunt outlined a “long-term ambition” to end National Insurance (NI) contributions for workers during the spring budget.
Brits saw their NI cut by 2p yesterday, which the Government claims signals a “long term ambition to end unfair double tax on work”.
NI is a tax on earnings which is used to pay for state benefits such as the state pension.
It is mandatory for workers over 16 earning above £242 a week, and for self-employed making a profit of more than £12,570 a year.
Labour has said ending NI would cost £46 billion.
11 income tax tips and tricks
Martin Lewis has revealed an from moneysavingexpert.com that Brits can use to see how National Insurance will affect them this year along with 11 tips to make it all smoother.
- Check your tax code – you may be owed £1,000s: free tax code calculator
- Transfer unused allowance to your spouse: marriage tax allowance
- Reduce tax if you wear/wore a uniform: uniform tax rebate
- Up to £2,000/yr free per child to help with childcare costs: tax-free childcare
- Take home over £500/mth? Earn £100+ switching bank: top bank accounts
- Save for pension from pre-tax income: pension need-to-knows
- Earn under £18,500/yr? Pay no savings tax: special savings allowance
- Earn over £18,500/yr? Save tax-free in an ISA: top cash ISAs
- After-tax income impacts mortgage availability: ultimate mortgage calculator
- Ensure you spend less than you earn: free budget planner
- Cut your bills without cutting back: free money makeover
What to check on your payslip
Look at whether you’ve been paid for the number of hours you’ve actually worked as well as for overtime, commission or bonus.
Check any entitlement to sick pay, holiday pay or maternity pay.
If you get paid per hour, your payslip has to show how many hours you’ve worked.
Also check your National Insurance number is correct.
Tax expert Jessica Middleton, from family business Middleton Professional Accounts Services, said: “If the number’s wrong, your state benefits, such as the pension or maternity pay, could be affected. It’s worth the effort to double-check.
“And don’t think this can’t happen – we have had clients using the wrong national insurance number for years and because various tax departments don’t talk to each other, they were none the wiser.”
Free debt advice
If you’re in debt there are plenty of services you can take advantage of and they offer free advice on how to manage debt.
Most of them can offer you free guidance and help in person, over the telephone or online.
- – 0800 138 7777
- – 0808 800 9060
- – 0800 138 1111
- – 0808 808 4000
What tax relief can you claim?
There are certain things that you can claim tax on under HMRC rules.
These include:
- Expenses for working from home
- Repairing or replacing small tools needed to do their job (for example, scissors or an electric drill)
- Cleaning, repairing or replacing specialist clothing (for example, a branded uniform or safety boots)
- Business mileage (not commuting)
- Travel and overnight expenses
- Professional fees and subscriptions