Millions of those in work across the UK have been told to keep an eye out for a key letter on their payslips - or they could risk losing out on money.
Those in employment receive a paper or online document detailing how much they are paid each month, reports Wales Online. The payslip also shows any deductions such as tax, which include income tax, National Insurance and pension payments.
Many people admit that they don’t bother to look at them and just enjoy the money reaching their bank account towards the end of the month.
But now, financial experts have stressed the importance that it is a personal responsibility to check that you are paying the correct amount of income tax.
READ MORE - Cheeky Edinburgh seller lists Lilt on eBay as fans cash in on 'original' drink
Jack Mackreth, of leading accountancy firm Kyzen Sports, said: “Tax codes can be wrong for a whole host of reasons. Maybe you’ve moved jobs and some of the paperwork wasn’t completed or sent across.
“But what many people don’t realise is that it’s your responsibility to check your own code is correct, not your employer or HMRC. So if you are ignoring these emails or not opening the envelopes containing your monthly pay slips, you might go on for months or even years over- or under-paying.”
The expert shared that the letter you should be looking out for on your tax code is 'L', which means you are entitled to the standard tax-free account.
He added: “The current code is ‘1257L’ but the numbers can change depending on what the Treasury decides. However, it will always have an ‘L’ on the end so that’s the letter you need to be looking out for.
"This applies to most people, but there are a host of different tax codes and having an understanding of them should stand you in good stead for keeping an eye on your pay slip in future.
“For example, ‘BR’ is the basic rate code and generally applies if you have a second job. An ‘M’ signifies that you are receiving 10 per cent of your partner’s allowance through the Marriage Allowance scheme, while an ‘N’ at the end of your tax code means you are donating 10 per cent of your own.
“Meanwhile, the ‘D0’ code indicates all of the income or pension from that particular role is being taxed at the higher rate - generally because you’ve got more than one.”
According to the Government website, the standard personal alliance is £12,570 - which is the amount you don't pay tax on. Anything you earn between £12,571 and £50,270 is taxed at 20 per cent, while £50,271 to £150,000 is the higher rate of 40 per cent.
For those who earn more, income above £150,000 is subjected to a 45 per cent levy. If you think you’ve paid too much tax, you should contact HMRC about getting a rebate.
As well as wages, this applies to expenses and redundancy payments. Jack said: “There are occasions when HMRC realises it has taken the incorrect amount of tax and will get in touch.
“You will either get a P800, or tax calculation letter, or details of how to apply to rectify the issues. With the new financial year starting in April, these documents are normally sent out between June and November of the same year.”
READ NEXT:
DVLA issues urgent warning to drivers who have had licence for nearly a decade
Edinburgh contestants wanted for new BBC quiz show from makers of The Chase
What is frontotemporal dementia and its symptoms as Bruce Willis is diagnosed
Mum fuming at parents' reaction to childcare request after she left the country
Edinburgh Storm Otto weather tracker shows how it will affect capital
