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Have You Checked Your Tax Code This Year? A Step-by-Step Guide

UUnknown

2026-02-21

10 min read

Millions may be on the wrong tax code. Step-by-step 2026 guide to check, correct errors, and claim refunds — anchored to Martin Lewis' warning.

Have You Checked Your Tax Code This Year? A Step-by-Step Guide

Hook: If you feel like you're quietly losing money every pay day, you're not alone — many PAYE taxpayers in the UK are on the wrong tax code. Martin Lewis has issued a fresh warning: millions may be overpaying. This guide gives you a clear, step-by-step process to check and correct your tax code, spot common mistakes, and recover any refunds you’re owed.

Why this matters now (2026 context)

HMRC’s data systems were upgraded through late 2024 and 2025, and early 2026 has seen a stronger focus on real-time information sharing between employers, pension providers and HMRC. That improved visibility helps catch errors — but it also means small mismatches in reported income, benefits or pensions are exposing tax-code mistakes faster than before.

Martin Lewis and other consumer champions have emphasised that the combination of multiple income streams, remote work, and more varied pension/personal arrangements has increased the risk that the wrong Personal Allowance application or an emergency tax code is applied. Put simply: the tax code you were given when you started a job may not reflect your current financial reality.

Quick overview: What your tax code does

Your tax code tells your employer or pension provider how much tax-free income you get in the current tax year. If the code is too low you pay too much tax; if it's too generous you could underpay.

Common code letters you will see include L (standard Personal Allowance), BR (tax all at basic rate—often used for a second job), D0/D1 (all income taxed at higher or additional rates), K (more tax to collect due to taxable benefits or unpaid tax), and 0T (no personal allowance applied). Understanding the basics helps you spot mistakes quickly.

Step-by-step: How to check your tax code now

Step 1 — Check your payslip and P60

Look at your latest payslip and your P60 (if you received one at the end of the tax year). The tax code appears in the top section alongside your National Insurance and taxable pay.
If you have more than one job or a job and a pension, check the payslip for each employer/provider — each payslip will show the code used for that income stream.

Step 2 — Log into your GOV.UK Personal Tax Account (PTA)

HMRC’s Personal Tax Account (accessible via GOV.UK or the HMRC app) is the central place to confirm how HMRC has recorded your allowances, benefits and tax code. This account now consolidates employer and pension data, payments on account, and coding notices.

Sign in with your Government Gateway / GOV.UK Verify credentials.
Go to the ‘PAYE’ or ‘Tax codes’ section and review the code(s) HMRC shows.
Look for any notes — HMRC often includes reasons next to a code, such as ‘Payslip reported taxable pension’ or ‘Adjustment for underpayment’.

Step 3 — Read your coding notice

HMRC issues a coding notice (sometimes called a P2 or 'coding statement') when it changes your code. This document explains the calculations and adjustments behind a code. If you haven't received one, HMRC should still show your code in your PTA. If the coding notice isn’t clear, keep it and use it when you contact HMRC.

Step 4 — Check for common red flags

Different codes at two jobs: If your main job isn’t using your full Personal Allowance (and you see BR or 0T on your second job) you could be losing tax-free allowance you’re entitled to.
Emergency tax (0T or Week 1/Month 1): If your payslip shows 0T or ‘W1/M1’ this often means HMRC didn’t have the required information (like a P45) when your employer set you up — it can overtax you until corrected.
K codes: These indicate HMRC is clawing back taxable benefits or unpaid tax through your tax code and can mean you’ll pay more tax each pay period.
Unexpected pension income: If you’re receiving a State Pension or private pension, check that it’s been correctly recorded and that your Personal Allowance hasn’t been incorrectly split.

If you find an error: Practical steps to correct a tax code

Step 1 — Gather evidence

Gather payslips, P60/P45, pension statements, benefit letters, and details of side income (self-employed, rental income, crypto disposals, dividends). The clearer your evidence, the faster HMRC can amend your record.

Step 2 — Update HMRC via your Personal Tax Account

If the mistake is simply missing data — for example HMRC doesn’t show a pension or is missing details of a new job — you can often update the details straight from your PTA. Use the ‘update your employment’ or ‘report a change’ options. This is usually the fastest route.

Step 3 — Tell your employer or pension provider

Payroll teams cannot change your tax code — only HMRC can — but they can ensure future pay reflects a corrected code once HMRC issues it. Email or call payroll and give them the code HMRC confirms. Keep copies of correspondence.

Step 4 — Contact HMRC if needed

If you can’t fix the issue online, contact HMRC. Use the helpline for PAYE and coding enquiries — you’ll need your National Insurance number and supporting documents. Expect HMRC to ask for digital copies (photo/scans) for verification.

Script you can use when contacting HMRC or payroll: “Hello, I’m [Full Name], NI [XX-XX-XX-XX]. My current tax code is [code]. I believe this is incorrect because [reason]. I can provide [p60/payslips/pension statement]. Can you confirm next steps and timescale to correct it?”

Step 5 — Follow up and record timescales

When HMRC accepts a change they usually issue an updated coding notice and inform your employer/pension provider. Corrections can appear in your pay within a few weeks, but follow-ups may be necessary — keep a dated record of all contact.

How refunds work and how to claim yours

If you’ve overpaid tax because of a wrong code, you could be due a refund. There are three common routes:

Automatic adjustment through PAYE: HMRC corrects the code and your employer adjusts future pay so you effectively get the overpayment back over the rest of the tax year.
Year-end reconciliation (P800): HMRC may send a reconciliation statement (often called a P800) explaining an overpayment and making a repayment directly or by adjusting the next code.
Manual claim: If you’ve stopped a job or are due a refund immediately, you can claim via your Personal Tax Account or by contacting HMRC. Keep evidence ready.

Note: HMRC will usually repay overpayments to your bank account if they have it on record. If they don’t, they will write to you with repayment details.

Common tax-code mistakes and how to avoid them

Mistake 1 — Not splitting Personal Allowance properly across multiple jobs

If you have two jobs, your Personal Allowance can be split between them. If employers are not told which job should carry the allowance, you may be taxed at BR on your second job, effectively losing tax-free space. Fix: decide which employer should use the allowance and notify HMRC through your Personal Tax Account.

Mistake 2 — Emergency tax after starting a job

If you start a job without a P45 or without providing completed starter details, your employer may use an emergency code. Fix: provide payroll with your P45 or ensure HMRC has the right starter checklist details. If you’ve overpaid, HMRC can refund the difference.

Mistake 3 — Benefits in kind and company cars not reported correctly

Taxable benefits should be reported to HMRC. If your employer fails to declare them properly, your tax code can be wrong. Fix: ask payroll to submit a P11D or confirm the benefits were included in the PAYE payroll; check HMRC coding notice for a corresponding K or other adjustment.

Mistake 4 — Pension contributions and salary sacrifice misapplied

Salary sacrifice reduces your taxable pay but only if correctly set up with payroll and reported to HMRC. Fix: get documentation from your employer and confirm with HMRC that your gross pay reflects the sacrifice arrangement.

Mistake 5 — Not declaring additional taxable income (side gigs, rentals, investments)

If you earn taxable side income that HMRC doesn’t know about, you may get a K code later to collect the tax through PAYE. Fix: declare additional income through your Self Assessment or report it via your PTA to avoid unexpected K codes or under/overpayments.

Case studies (realistic examples)

Case A: Sarah, two part-time jobs

Sarah had two part-time jobs. Both employers applied basic tax codes and she paid tax at source on both. After checking her PTA, she split her Personal Allowance to her main job and corrected the second job to BR. Result: an immediate improvement in take-home pay and a small refund for the prior months once HMRC issued a corrected coding notice.

Case B: Tariq, emergency tax after changing roles

Tariq started a new role without giving his P45; his employer used 0T. He contacted HMRC via his PTA, uploaded his previous payslip and P45, HMRC issued a corrected code and his employer updated payroll. Tariq received the overpaid tax across the next payruns and a small lump-sum adjustment.

Advanced strategies and 2026 predictions

Be proactive with your Personal Tax Account: With HMRC enhancing data checks in 2025–2026, keeping your PTA accurate is the single best defence against coding errors.
Consolidate where possible: If you have multiple small jobs, evaluate whether combining hours under one employer (or designating one as the main job) reduces BR/0T issues.
Use digital records: Maintain scanned copies of P45s, P60s, and benefit letters. HMRC increasingly requests digital evidence for quick resolution.
Monitor crypto and investment disposals: As HMRC improves reporting on crypto and capital gains, make sure disposals and gains are declared where required to avoid later K adjustments to your tax code.

How long will it take — realistic expectations

Timescales vary. Simple online updates in your PTA can show in the next payroll cycle. If HMRC needs to investigate and confirm supporting documents, it can take several weeks. In most cases, expect corrective action within 2–8 weeks; keep following up if it goes beyond that.

When to get professional help

If your situation involves complex income streams (high investment income, significant rental profits, overseas income, or large benefits-in-kind) consider engaging a tax adviser. For most PAYE employees, the steps above will resolve problems without paid advice.

Checklist: What to do this week

Check your most recent payslip and P60 for your tax code.
Log into your GOV.UK Personal Tax Account and confirm the tax code and reasons.
If something looks wrong, gather payslips, P45/P60, pension letters and benefits statements.
Update HMRC online, or call the PAYE helpline if necessary. Use the script above.
Tell payroll to watch for the updated coding notice and adjust future pay.

Final notes — heed the Martin Lewis warning

Martin Lewis’ recent warning has helped focus attention on an avoidable source of lost income for many households. With HMRC’s increasing digital oversight in 2026, now is the time to act: a short check could lead to an immediate improvement to your monthly cashflow or a refund of previously overpaid tax.

Call to action

Don’t wait. Open your GOV.UK Personal Tax Account today and check your tax code — then take the steps above to correct any error. If you need a printable checklist or a phone script to contact HMRC or your payroll department, download our free template and start claiming what’s rightfully yours.

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