Thousands of UK taxpayers could be overpaying tax right now due to an incorrect tax code—and many don’t even realise it.
If your tax code is wrong, you might be losing hundreds or even thousands of pounds each year through unnecessary tax deductions.
The good news? Fixing a wrong tax code is straightforward, and you could claim back any overpaid tax dating back up to four years.
We reveal seven warning signs that you may have an incorrect tax code, show you how to get it corrected, and explain how to reclaim the money you’re owed.
Whether you’ve changed jobs, received company benefits, or simply noticed your take-home pay seems lower than it should be, this troubleshooting guide will help you identify and resolve tax code problems quickly.
For basic information about how tax codes work, you might want to start with our guide explaining what tax codes mean.
But if you suspect something’s already wrong with your code, read on—we’ll help you fix it.
7 Warning Signs Your Tax Code Might Be Wrong
Spotting a wrong tax code early could save you significant money.
Here are the most common warning signs that suggest your tax code needs immediate attention.
1. Your Take-Home Pay Has Suddenly Dropped
One of the most obvious indicators of a tax code problem is an unexpected decrease in your monthly take-home pay.
If your salary hasn’t changed but you’re receiving less money, your tax code might have been altered incorrectly.
This commonly happens when HMRC receives new information—perhaps from a previous employer or about benefits you’re receiving—and adjusts your code without you realising.
Even a small change to your code could result in deductions of £50-£200 extra per month.
2. You’re on an Emergency Tax Code for More Than 3 Months
Emergency tax codes (ending in W1, M1, or X) are meant to be temporary solutions when your employer doesn’t have your complete tax information.
If you’ve been on an emergency code for more than two or three months, something has gone wrong.
Emergency codes could mean you’re paying significantly more tax than necessary because your tax-free allowance isn’t being properly calculated across the full year.
Check your payslip—if you see 1257L W1, 1257L M1, or 1257L X, you might be overpaying tax every single month.
3. Your Code Doesn’t Reflect Recent Life Changes
Life changes often require tax code adjustments, but HMRC might not know about them unless you’ve informed them directly.
Consider whether any of these situations apply to you:
- You’ve stopped receiving a company car or other benefits
- You’ve left a second job or stopped receiving a pension
- You got married or entered a civil partnership
- Your student loan has been paid off
- You’ve reached state pension age
If your tax code hasn’t been updated to reflect these changes, you could be paying incorrect amounts of tax.
4. You Have a K Code but No Longer Receive Certain Benefits
K codes indicate you’re receiving benefits or income that use up more than your Personal Allowance, resulting in additional tax deductions.
These codes are appropriate in certain situations—but if your circumstances have changed, the K code might now be incorrect.
For example, if you previously had a company car valued at £8,000 annually but returned it six months ago, your K code should have been revised.
Continuing to pay extra tax for a benefit you no longer receive could cost you hundreds of pounds monthly.
5. Your Second Job Uses Your Main Tax Allowance
When you have multiple jobs, your Personal Allowance (typically £12,570) should only apply to one of them—usually your main source of income.
Your second job should normally be taxed using a BR (basic rate), D0 (higher rate), or D1 (additional rate) code.
If both jobs are using codes that include your allowance (like 1257L on both), you’re effectively receiving your allowance twice, which means you’re underpaying tax.
Whilst this might seem beneficial short-term, HMRC will eventually spot the error and could demand repayment—potentially with interest.
6. You’re Claiming Work Expenses but Your Code Hasn’t Changed
If you’ve successfully claimed tax relief for work expenses—such as professional fees, uniform costs, or working from home—your tax code should reflect this adjustment.
The code should increase to account for the additional tax-free allowance you’re entitled to.
For instance, if you claimed £500 in professional subscription relief, your tax code might change from 1257L to 1307L.
If you’ve made a successful claim but see no change in your code, you might not be receiving the tax relief you’re entitled to.
7. HMRC Has Sent You a P800 Showing Overpayment
A P800 tax calculation from HMRC comparing what you should have paid against what you actually paid is a clear indicator that something was wrong with your tax code during the year.
Whilst the P800 might offer you a refund, it’s also a signal that your current code might still be incorrect.
Receiving multiple P800s suggesting overpayment across several years strongly indicates a persistent issue with your tax code that needs addressing to prevent future overpayments.
Most Common Reasons Tax Codes Go Wrong
Understanding why tax code errors occur might help you prevent future problems. Here are the situations that most frequently result in incorrect codes.
Starting a New Job Without a P45
When you begin new employment without providing a P45 from your previous role, your employer might not know your correct tax position.
They’ll typically place you on an emergency code temporarily, but this should only last until HMRC processes your information.
If you’ve been at your new job for several months and still have an emergency code, it’s time to investigate.
Employer Reporting Errors
Sometimes employers make mistakes when reporting your employment details or benefits to HMRC through their payroll systems.
These errors could include incorrectly valued company benefits, wrong start or end dates, or miscalculated taxable perks.
Whilst most payroll departments are careful, manual entry errors do occur.
Outdated Information from Previous Years
HMRC’s systems sometimes carry forward information from previous tax years that’s no longer relevant.
For example, if you received a company car three years ago, HMRC’s records might still show this benefit even though you returned it long ago.
Unless you actively notify them of changes, they might continue using outdated data.
Multiple Income Sources Creating Confusion
Managing tax codes becomes significantly more complex when you have multiple jobs, pensions, or other PAYE income sources.
HMRC needs to allocate your Personal Allowance correctly and ensure each source is taxed appropriately. With several moving parts, the risk of errors increases substantially.
State Benefits Affecting Your Code
Receiving certain state benefits—particularly state pension—can affect your tax code because these benefits use up part of your Personal Allowance.
If the Department for Work and Pensions doesn’t communicate properly with HMRC, or if benefit amounts change, your code might not reflect your actual situation.
How to Check If Your Tax Code Is Wrong (Step-by-Step)
Don’t wait for HMRC to spot errors—take control and verify your tax code yourself. Here’s exactly how to check whether your code is correct.
Step 1: Locate Your Current Tax Code
Find your tax code in one of these locations:
- Your most recent payslip (usually near the top)
- Your P60 annual tax summary
- Your Personal Tax Account on the HMRC website
- The HMRC app for smartphones
- A PAYE Coding Notice (P2) if HMRC has sent one
Write down your complete tax code, including any letters at the end. For example: 1257L, S1257L, 500T, or BR.
Step 2: Use HMRC’s Online Tax Code Checker
HMRC provides a free online tool that explains what your tax code means and helps you spot potential errors.
Visit the ‘Check your tax code’ service on GOV.UK and enter your code along with some basic information about your circumstances.
The tool will break down what each part of your code means and highlight any obvious issues.
However, this tool has limitations—it can’t spot all types of errors, especially those related to changing circumstances.
Step 3: Review Your PAYE Coding Notice
If you’ve received a PAYE Coding Notice (form P2) from HMRC or an online notification, review it carefully.
This document explains exactly how your tax code was calculated, including:
- Your Personal Allowance amount
- Any additions (like work expense claims)
- Any deductions (like company benefits or underpaid tax)
- How these figures resulted in your final code
Check each item carefully. Do you still receive all the benefits listed? Are there expense claims missing that you’ve submitted? Are there old deductions that no longer apply?
Step 4: Compare Against Your Actual Circumstances
For more detailed guidance on understanding your tax code, see our comprehensive tax code guide. Then verify that your code accurately reflects your current situation by asking yourself:
- Do I receive all the company benefits shown in my code calculation?
- Have I claimed all eligible work expenses?
- Do I have multiple jobs/pensions being taxed correctly?
- Is my student loan plan type correct?
- Have I informed HMRC about recent life changes?
Any discrepancies between your code and your reality suggest your code needs updating.
Step 5: Calculate What Your Code Should Be
For the 2025/26 tax year, most people start with the standard Personal Allowance of £12,570. To estimate what your code should be:
- Start with £12,570 (standard allowance in the 2025/2026 tax year)
- Add any expense claims you’ve successfully made
- Subtract the value of any company benefits
- Subtract any underpaid tax from previous years
- Divide the result by 10
For example: £12,570 + £500 (professional fees relief) – £3,000 (company car) = £10,070 ÷ 10 = 1007. Your code should be approximately 1007L.
If your actual code differs significantly from this calculation, it’s likely incorrect.
How to Get Your Wrong Tax Code Fixed (The Right Way)
Once you’ve identified that your tax code is wrong, taking prompt action will minimise further overpayments and speed up any refunds you’re owed. Here’s exactly what to do.
Method 1: Update Through Your Personal Tax Account
The quickest way to fix many tax code issues is through your HMRC Personal Tax Account. This online service allows you to:
- Tell HMRC about changes to your employment or income
- Update company benefits information
- Check your tax code and see how it was calculated
- Track the status of your tax code change request
To access your Personal Tax Account, you’ll need to register on the GOV.UK website using your National Insurance number and some personal details.
Once registered, navigate to the ‘PAYE’ section to review and update your tax code information.
Changes made through your Personal Tax Account typically process within 2-3 weeks, after which HMRC will notify your employer of your corrected code.
Method 2: Contact HMRC’s Income Tax Helpline
For more complex issues or if you prefer speaking to someone directly, contact HMRC’s Income Tax helpline on 0300 200 3300. When calling, have ready:
- Your National Insurance number
- Recent payslips showing your tax code
- Details of why you believe your code is wrong
- Information about company benefits, expenses, or other relevant factors
HMRC advisors can review your code whilst you’re on the call, explain how it was calculated, and arrange for corrections if necessary.
Lines are typically busiest on Monday mornings and quieter mid-afternoon Tuesday through Thursday.
Method 3: Submit Evidence for Specific Issues
Some tax code corrections require supporting documentation. For example:
- Work expenses: Submit form P87 with receipts or proof of expenses
- Ended benefits: Provide confirmation from your employer about return dates
- Left a job: Submit your P45 if your new employer hasn’t already
- Student loan paid off: Provide confirmation from Student Loans Company
Upload documents through your Personal Tax Account or post them to HMRC with your National Insurance number clearly marked on each page.
What Happens After You Request a Tax Code Change
Once HMRC receives your tax code correction request, they will:
- Review the information you’ve provided (typically 2-3 weeks)
- Calculate your correct tax code
- Send you a new PAYE Coding Notice explaining the change
- Notify your employer electronically
- Your employer applies the new code from your next payment
Check your next payslip carefully to confirm the new code has been applied. If your employer hasn’t updated it within a month of HMRC issuing the new code, contact your payroll department.
How to Claim Back Overpaid Tax from a Wrong Code
If you’ve been on an incorrect tax code for months or even years, you could be owed a substantial tax refund. Here’s how to claim back what you’re entitled to.
Understanding Your Refund Entitlement
You can claim back overpaid tax for up to four previous tax years.
This means in the 25/26 tax year you’ve been overpaying due to a wrong code since 2020/21, you could potentially reclaim thousands of pounds.
The amount you’re owed depends on how wrong your code was and for how long.
For example, someone on an emergency code earning £30,000 might overpay around £1,000-£2,000 per year compared to the correct code.
Over four years, that’s £4,000-£8,000 waiting to be reclaimed.
How HMRC Processes Tax Code Refunds
When HMRC corrects your tax code and identifies you’ve overpaid, they typically handle refunds in one of two ways:
Adjustment through future pay: If the overpayment is for the current tax year and relatively small, HMRC might adjust your code to collect less tax over the remaining months, effectively giving you the refund gradually.
Direct repayment: For larger amounts or overpayments from previous tax years, HMRC will issue a refund directly to your bank account or send a cheque.
This typically takes 4-8 weeks from when they’ve confirmed the overpayment.
Step-by-Step Refund Claim Process
- Gather your documentation: Collect P60s, payslips, and P45s for all years you believe you overpaid
- Calculate the overpayment: Work out how much extra tax you paid due to the wrong code
- Submit your claim: Contact HMRC through your Personal Tax Account or call the helpline
- Provide evidence: Send any supporting documents HMRC requests
- Wait for confirmation: HMRC will review and confirm the amount owed
- Receive your refund: Money will be transferred to your account or sent via cheque
Special Refund Circumstances
If you’ve left employment: Submit your P45 to HMRC along with a claim for any overpayment. They’ll calculate what you’re owed based on your actual earnings for the year.
If you’re now self-employed: Claim overpayments through your Self Assessment tax return rather than through PAYE refund processes.
If you’ve left the UK: You can still claim refunds by completing form P85 and submitting it with your P45. HMRC will calculate what you’re owed and send it to your overseas address or UK bank account.
Take Control of Your Tax Code Today
A wrong tax code could be costing you hundreds or thousands of pounds annually—money that rightfully belongs to you. Don’t assume HMRC will automatically spot and fix errors.
The responsibility for checking your tax code ultimately rests with you.
The warning signs are clear: unexplained drops in take-home pay, emergency codes lasting months, outdated benefit information, or multiple P800 notices all suggest your code needs attention.
By checking your code regularly—particularly after any change in employment or circumstances—you can catch errors early and minimise overpayments.
Fixing a wrong tax code is straightforward when you know the process.
Whether you use HMRC’s online services, contact them directly, or seek professional help, correcting your code will ensure you’re paying exactly the right amount of tax from your next payday onwards.
More importantly, if you’ve been overpaying due to an incorrect code, you could claim back up to four years of overpayments. That money is yours—it’s simply a matter of claiming what you’re rightfully owed.
