HMRC: Britons start to get letters on Personal Allowance & tax codes – look out for yours

Martin Lewis urges everyone to check their tax code

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HMRC, formally known as Her Majesty’s Revenue and Customs, helps millions of people with their tax affairs each year. As the new tax year draws closer, the Revenue has provided an important update to Britons which may include vital changes. A new tax year will often mean people will need to consider what they are due to earn, and subsequently how much tax they are set to pay.

To provide the most guidance, HMRC is issuing letters which contain the latest information.

Britons should look out for a letter from the Revenue in the post, known as a ‘tax code notice’ which will show a person’s most up-to-date tax code and Personal Allowance entitlement.

The letter should read: “This is to tell you your tax code(s) for April 6, 2021 to April 5, 2022.

“This tax code should match those shown on any future payslip(s) or pension advice slip(s) you receive.”

A number of people have reported they have already received the letter in the post ahead of the new tax year.

One said: “I’ve had my coding letter for April 2021 for the next year. My personal allowance is £12,570, does this include the Working From Home allowance?”

Another commented: “Had a letter from the tax office today, telling me my new tax code for next year.”

And a third wrote: “Got a letter from HMRC thought it was a tax rebate – but turns out it’s just a tax code letter.”

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As is evident from Britons’ comments, some will have questions about the information their letter contains. 

If a person feels they need further assistance in understanding the information, they should contact HMRC as soon as possible.

In addition, some people may believe the information contained within the letter is incorrect. 

In a similar way, reaching out to HMRC in this instance will be key in order for the issue to be rectified as soon as possible. 

People can visit the official Government website to find out more about tax codes and Personal Allowance. 

A tax code starts with a number and ends with a letter normally, and provides details on tax-free income.

Once HMRC works out someone’s Personal Allowance, they will also look at income a person has not paid tax on.

This is taken away from a person’s Personal Allowance to provide the sum of tax-free income someone is allowed in a tax year.

HMRC then introduces a letter into a tax code, which refer to a person’s situation and how this will affect their Personal Allowance.

The letter L, for example, represents a person is entitled to the standard tax-free Personal Allowance, while NT will show a person is not paying any tax on this income.

A full list of letters which can appear on tax codes is made available on the Government website to offer further clarity. 

However, finally, it is worth being aware of emergency tax codes, such as 1250W1, 1250M1, or 1250X.

These codes mean a person will pay tax on all income above the basic Personal Allowance – but they are only temporary.

These could arise if a person is receiving the state pension, starting a new job, or is now working for an employer after being self-employed.

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