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Tax code warning as Britons could be ‘paying wrong amount’ – ‘Several things to consider’

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With bills on the rise, and the cost of living crisis worsening, many families may be feeling the financial squeeze so it’s important for people to ensure they are being as tax savvy as possible to avoid more of their money going to the Government. Express.co.uk spoke exclusively to Michael Barrow, financial advisor at Claro Money on how Britons can ensure their money is working hard for them.

He said: “There are several things to consider when trying to save on tax.

“If you are employed, it’s important to check your tax code on your payslip to ensure you are paying the right amount of tax and national insurance.

“It’s worth noting that National Insurance has just risen, so this month’s payslip may look different to previous ones. You could be paying the wrong amount.

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“If you think the amount that you’re paying is wrong, you should contact HMRC.”

The National Insurance (NI) tax rate saw a 1.25 percent increase at the start of April, adding further financial strain to workers across the UK.

As National Insurance has just risen, payslips may look different to previous ones so Britons are urged to double check.

People with the wrong tax code could end up paying thousands more than they need to.

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Tax codes are assigned by HMRC to ensure that people pay the correct amount of tax, but errors in this system can occur.

Lastly, Mr Barrow suggested a savings vehicle which can be used in many different ways.

He mentioned Individual Savings Accounts (ISAs) as something that Britons can use no matter their goals.

He said: “Finally, your cash ISA, Stocks & Shares ISA, Lifetime ISA and pension allowances all reset at the beginning of the tax year.

“This means that you can start putting money into these again. The earlier in the year you start, the longer there is for your contributions to generate interest or returns.”

With a stocks and shares ISA, Britons are investing their cash which could potentially give higher returns than money in the bank.

By using an ISA, Britons are giving their money more time to grow tax-free, which means they could end up with more in the longer term.

With investing comes risk so people should seek advice before putting their money somewhere.

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