HMRC send you a coding notice so that you can see what tax codes they have asked your employer to use when they tax your income. We recommend that you check that the information on the notice is correct, if it isn’t then the tax you pay will be wrong.
Following the links on the notice should help you understand what you need to check. Just click on the red wording or scroll down to the appropriate letter. Also check any notes in the ‘For Help’ column on the coding notice itself.
If you have a new tax code your take home pay from your employment may change. It may increase or reduce. You must check that the code is correct, otherwise you may not pay the right amount of tax by the end of the tax year.
This figure is the total of the ‘allowances’ you are entitled to less any ‘restrictions’ or ‘adjustments’. To check it is correct, consider all the following:
a) allowances – Check that you have been given the correct allowances.
b) restrictions – Check if you have any taxable state benefits, for example carers allowance and state pension. If so, is the right amount of benefit included?
c) adjustments – These are usually for estimated amounts of additional tax that you owe. If you have an adjustment it is because HMRC believe you have an underpayment from either an earlier year or this year that they are going to collect using your tax code this tax year. It isn’t actually the amount you owe. The amount you owe is shown at E (on page 2 of the coding notice – you may need to scroll down to see this). Check that you had an underpayment of this amount, if not contact HMRC.
Are all your employments and/or pensions listed here? If not, contact HMRC.
Do the tax codes shown here agree to the tax code shown on your payslips or payment advice letters?
Note – check the date of the coding notice and compare it to payslip and payment advice dates, as changes might not be processed until the next payment period. If your new code is not being used by your employer, you might need to contact them to find out why. If they have not received the new code, you might need to contact HMRC.
This is an underpayment from either an earlier year or this year. Check that you agree with this figure, if not contact HMRC.
If you agree with the information and are happy that your employers have the correct codes – do nothing.
If you are unsure about anything or believe the information is wrong – Contact HMRC immediately on 0300 200 3300 or check your personal tax account. If you have spoken to HMRC but are still unsure, please call us on the phone number at the top of this screen.