{"id":281,"date":"2022-05-21T17:44:12","date_gmt":"2022-05-21T16:44:12","guid":{"rendered":"https:\/\/blogs.kcl.ac.uk\/moneymentors\/?p=281"},"modified":"2022-11-04T19:38:20","modified_gmt":"2022-11-04T19:38:20","slug":"payslips","status":"publish","type":"post","link":"https:\/\/blogs.kcl.ac.uk\/moneymentors\/2022\/05\/21\/payslips\/","title":{"rendered":"Payslips!"},"content":{"rendered":"\n
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Photo by Toa Heftiba<\/a> on Unsplash<\/a><\/figcaption><\/figure>\n\n\n\n

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Why your tax code is a need-to-know<\/strong> <\/p>\n\n\n\n

For some of us, maybe a tax code is that confusing combination of letters and numbers in the corner of our payslip that we generally ignore. For most of us students, we wouldn\u2019t be earning enough in our part-time jobs to pay income tax anyway \u2013 the first \u00a312,570 you earn per year is tax-free (called the Personal Allowance) and it\u2019s only over that amount that you start to pay income tax. <\/p>\n\n\n\n

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What is a tax code?<\/strong> <\/p>\n\n\n\n

In the UK we work on a PAYE (pay-as-you-earn) system. This means that with every paycheck, your employer is automatically deducting tax on your behalf. Your tax code tells them how much tax to deduct. <\/p>\n\n\n\n

The numbers in your tax code indicate the amount of Personal Allowance, so for someone with the usual personal allowance of \u00a312,570, the code is usually 1257 (with a letter on the end!). The letters also indicate things about your situation, for example, if you have more than one job, if you\u2019re sharing some of your personal allowance with your spouse, or if you are using an emergency tax code (e.g. you\u2019ve just started a new job and they aren\u2019t sure how much to tax you yet!).<\/p>\n\n\n\n

You can find your tax code on your payslip, or your P45, P60, and even online with HMRC. <\/p>\n\n\n\n

If you\u2019re self-employed, we\u2019ve provided more information in the links at the bottom of this article. <\/p>\n\n\n\n

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What if it\u2019s wrong?<\/strong> <\/p>\n\n\n\n

If your tax code is wrong, one of two things could happen: you could end up paying too much tax and have less money paid into your bank account each month than you should, OR you could be paying too little tax, enjoying your salary now but being hit by a huge bill (which could run into the thousands!) in a few months or years\u2019 time. Neither situation is good. <\/p>\n\n\n\n

You can check whether your tax code is correct by using a tax code calculator, such as the one on Money Saving Expert<\/a>. This can highlight any obvious problems. <\/p>\n\n\n\n

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How can I fix it?<\/strong> <\/p>\n\n\n\n

It is annoying, frustrating, and sometimes very expensive to fix a tax code error, but you should sort it out as soon as possible! <\/p>\n\n\n\n

If you have paid too much tax, you can get the money back! Hooray! You need to let HMRC know, which you can do either online or by phoning them. <\/p>\n\n\n\n

If you haven\u2019t paid enough tax, you will usually need to pay the money back to HMRC. This is often done by HMRC changing your tax code so that you pay more tax in the current year \u2013 this extra tax makes up for the shortfall in the previous year(s). <\/p>\n\n\n\n

If it\u2019s a large amount that HMRC can\u2019t get through paying more tax, they will send you a bill, and you can either pay it off in one sum or arrange a payment schedule with them called a \u201ctime to pay agreement\u201d. However, if you don\u2019t pay it off in one lump sum you will be charged interest on it and could be charged a penalty for any late payments. It acts more like a loan. <\/p>\n\n\n\n

<\/p>\n\n\n\n

For more information\u2026<\/strong> <\/p>\n\n\n\n

If you think you\u2019re paying too much tax<\/a> <\/p>\n\n\n\n

Lots of FAQs for student taxes<\/a> <\/p>\n\n\n\n

A tax code checker<\/a> <\/p>\n\n\n\n

Find out if you need to pay tax in your student job<\/a> <\/p>\n\n\n\n

If you\u2019re self-employed<\/a> <\/p>\n\n\n\n

<\/p>\n\n\n\n

Sarah<\/strong><\/strong> Chitson
King\u2019s Student Money Mentor
Part of Money & Housing Advice<\/strong><\/p>\n\n\n\n

The King\u2019s Student Money Mentors blog shares our students\u2019 personal experiences and thoughts on money-related topics. Any reference, opinions or recommendations on a particular company\/brand are only the views of the student(s) who wrote the blog post. King’s College London, the Money & Housing Advice service and the Money Mentor project do not share the views in the blogs nor endorse any of the companies mentioned.<\/em> Readers should conduct their own research before using any companies mentioned in our blog posts.<\/em>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Why your tax code is a need-to-know  For some of us, maybe a tax code is that confusing combination of letters and numbers in the corner of our payslip that we generally ignore. For most of us students, we wouldn\u2019t be earning enough in our part-time jobs to pay income tax anyway \u2013 the first … <\/p>\n

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