Tax Rebates & Refunds

Common tax code questions answered pt.2

September 5, 2012
Posted in Income Tax — Written by Jennifer

The tax system can be tricky to fully understand, but luckily, you only need to know about the parts that are relevant to you. One thing you need to know about is tax codes, because you could end up paying too much tax if your code is wrong.

In pt.1 of this guide, we looked at a couple of common tax code-related questions. Let’s answer some more, such as:

What are the most common tax codes?

The most common tax code letter is L, which refers to people who are eligible for the basic personal Allowance or people who are on emergency tax codes. Another common tax code is BR, which refers to people who are taxed at the basic rate of 20%, such as for a second job.

What are emergency tax codes?

An emergency tax code is used as a temporary measure by your employer whilst HMRC figures out what tax code you should permanently be on. Sometimes emergency tax codes are used by accident, resulting in overpayment of tax and an inevitable tax rebate claim.

What do I do if I think I’m on the wrong tax code?

If you think your tax code is wrong, make sure you inform HMRC right away. They can investigate the matter and issue a tax refund if your tax code was incorrect and you were paying too much tax.

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