Are you owed a tax rebate? Use MoneySavingExpert's free tax code calculator to check

WORKERS are being urged to check their tax codes as the first pay slips of the new tax year land, and it's especially important for those who've lost their jobs or seen their income drop because of coronavirus.

That's because if it's wrong you could be overpaying tax, which means you may be due a refund, or you could be underpaying, which means you'll likely get a big shock when HMRC asks for it back. has issued the warning as new figures reveal 6.3million people have been placed on the government's furlough scheme, which pays 80 per cent of wages up to £2,500 a month.

The consumer site says as the new tax year began last month you'll likely have got your first payslip with your new tax code on meaning now's a good time to check.

Tax codes are a series of letters and numbers used to determine how much tax you should pay. Most people will be on the 1250L tax code this tax year.

The numbers '1250' mean you get a tax free personal allowance of £12,500, while 'L' is the most common letter and means you're eligible for the full personal allowance.

What do the letters mean in my tax code?

THE letters in your the code on your payslip indicates how much tax you have to pay. Here's our guide to what each of the letters mean:

  • L You’re entitled to the standard tax-free Personal Allowance
  • M Marriage Allowance: you’ve received a transfer of 10 per cent of your partner’s Personal Allowance
  • N Marriage Allowance: you’ve transferred 10 per cent of your Personal Allowance to your partner
  • S Your income or pension is taxed using the rates in Scotland
  • T Your tax code includes other calculations to work out your Personal Allowance, for example it’s been reduced because your estimated annual income is more than £100,000
  • 0T Your Personal Allowance has been used up, or you’ve started a new job and your employer doesn’t have the details they need to give you a tax code
  • BR All your income from this job or pension is taxed at the basic rate (usually used if you’ve got more than one job or pension)
  • D0 All your income from this job or pension is taxed at the higher rate (usually used if you’ve got more than one job or pension)
  • D1 All your income from this job or pension is taxed at the additional rate (usually used if you’ve got more than one job or pension)
  • NT You’re not paying any tax on this income
  • Tax codes starting with K mean you have income that isn’t being taxed another way and it’s worth more than your tax-free allowance.

Other people may get different letters if they qualify for perks such as company cars or private health insurance via their employer, for example.

To check if your tax code is correct, you can use's tax code calculator or's tax checker tool.

If it's wrong, contact HMRC to let it know on 0300 200 3300. If it's right, you don't need to do anything.

You don't need to notify HMRC simply because you've been furloughed or lost your job though, as it says your employer will notify it of such changes – or you'd notify HMRC when filing your self-assessment tax return – and it should update your tax code and how much tax you pay accordingly.

MoneySavingExpert adds that those who earn under £100,000 and have just the one job are unlikely to see their tax code change.

It says the typical scenarios where your tax code is more likely to have changed is as follows:

  • If you usually earn more than £100,000 a year and you've been furloughed
  • If you've got more than one job and you've been furloughed on more than one job
  • If you've lost your main job but still have others
  • You had pension and work income but now just have pension income
  • You retired from the NHS but have gone back to help due to the crisis

But points out in most of these scenarios these changes in circumstances should be updated automatically via self-assessment or by your former employer notifying HMRC.

Of course, it's worth keeping an eye on your tax code to ensure these go through, and HMRC says if you have any concerns you can also contact it via your online personal tax account.

Millions of workers have been ordered to stay at home where possible as companies follow a government ban on all non-essential travel.

There are a number of schemes open to those struggling to pay their energy bills and ways to cut down on your usage to reduce costs. founder, Martin Lewis, has also revealed how to claim back tax if you're working from home.

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