Sunday, 7 February 2010

Tax codes and how to check yours and get a refund!

I have decided to offer a public service educating people to understand a little about PAYE and their Tax Codes. Most people choose to ignore their tax codes and allowances only because they cannot understand them. This in turn means you cannot question it and will not spot if anything is amiss. As I have worked for many years as a Financial Controller amongst other things, I have seen time and time again that there are many people that are having their wages calculated whilst on the wrong Tax Code. When I worked as a freelance FC the first thing I check when I start a new job is the staffs Tax Codes. My reasons for doing this are twofold. With the fiasco announced from the Inland Revenue that their new system will probably create in excess of over a million more people getting the wrong Tax Code for the new tax year too, and the fact that a lot of people have come out of work and maybe then gone back into work at a different company, I thought now is the time to get people to understand their Tax Codes and question whether it is correct or not. Changing your place of employment or the source of where you are receiving your income from is the single most likely reason why somebody is not on the correct tax code!
The following information is general and applies to the average worker with one or maybe two jobs or receiving a pension and working and not too many complications in regard to taxable benefits. I will try and write it in simple English to reach the average working person. It is impossible for me to cover every single possibility of every single person’s personal circumstances. This information will work for most people.......I promise! Please note this information is all about averages and this is where most of the population fall. Having and benefiting from your Tax allowances is all about INCOME. Where this income is from is not important as to whether you’re provided with an allowance!! Even the long-term unemployed claiming every benefit imaginable have a yearly tax allowance.

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