Martin Lewis, the founder of MoneySavingExpert.com, has issued an urgent warning to millions of UK employees, urging them to check their tax codes without delay. Speaking on his BBC Sounds podcast, the consumer champion stressed that an incorrect code could see people overpaying or underpaying by thousands of pounds.
Why Your Tax Code Matters Now
Lewis's alert is aimed at anyone in employment earning more than the standard Personal Allowance of £12,570 for the 2025/26 tax year. A tax code, a combination of numbers and a letter, instructs your employer or pension provider how much income tax to deduct. It fundamentally dictates how much of your income is tax-free.
"Millions of them are wrong each year," Lewis stated emphatically. He highlighted the critical point that the legal responsibility for ensuring your tax code is correct lies with you, not your employer or HM Revenue and Customs (HMRC).
How to Decode and Check Your Tax Code
Lewis explained the most common code, 1257L. The numbers (1257) represent your tax-free allowance. "Add a zero to the end, so you've now got £12,570. That's how many pounds you can earn each year before you have to start paying income tax," he said. The 'L' suffix denotes the standard personal allowance category.
Errors frequently arise due to life changes, such as:
- Starting a new job or having multiple jobs
- Receiving company benefits or a pension
- Changes to taxable state benefits
- Using the Marriage Allowance
You can find your current tax code on your payslip, a P45 or P60 form, or within your Personal Tax Account on the GOV.UK website.
The Costly Consequences of Getting It Wrong
The ramifications of an incorrect code are two-fold and serious. Firstly, you could be paying too much tax, effectively giving the government an interest-free loan and losing out on your hard-earned money. Secondly, and perhaps more dangerously, you could be paying too little.
"Sounds good? It isn't," warned Lewis. "Because at some point they will catch up and make sure you pay the tax that you owe. So, you could be hit, slapped across the face with a big tax bill and not have the cash to pay it, which is a nightmare."
To avoid unexpected bills or delayed refunds, Lewis recommends using one of the many free online tax code calculators to perform a quick check. His final advice is clear: "Each year when you get your tax code, you should check it, and if you've never checked it before, it's worth going and finding it now and doing a check." Taking a few minutes now could prevent significant financial distress later.
