Martin Lewis‘s team have warned all workers that they could unknowingly be owed thousands of pounds – and urged people to check their payslips. 

The update was shared on behalf of the finance guru to his website, Money Saving Expert (MSE), where a journalist urged people to thoroughly check their tax to ensure they are paying the correct amount to HMRC.

Each year, millions of people across the UK pay over the odds in tax because they are in the wrong tax band, the writer of the article claimed.

‘Is your tax code correct? If not, you could be owed £1,000s,’ the journalist wrote on the money-saving blog.

They added: ‘If you’re an employee (ie, you work for someone), it’s important to understand that legally your tax code is your responsibility to check, not your employer’s nor HM Revenue & Customs’. Millions of these are wrong each year.’ 

For those who are paying in excess, this could mean they are owed thousands of pounds.

In contrast, those mistakenly placed in a tax bracket below their salary could find themselves having to foot an eye-watering bill if the error is not corrected.

‘If yours is, you may be overpaying tax and due money back, or underpaying and likely to face bill shock in the future,’ the article read. 

Martin Lewis’s team has warned workers that they could be owed thousands of pounds in mispaid tax (Martin Lewis pictured in June)

A worker’s tax code can be found on any pay slip or other formal work document, such as a P45, P60, or pension advice slip.

The article revealed the case of a woman who discovered that she had been paying through the nose on taxes.

After checking her finances, Michele realised she had been paying tax on ‘every penny’ without any allowances.

In the MSE blog post, Michele’s account read: ‘I discovered I was paying on every penny I earned, without any allowance. Likely because I’d been self-employed, but I stopped trading three years ago, and my tax code for my salaried employment was not changed.

‘It took an hour on the phone, but I have never earned so much in an hour, I have now been refunded £9,400! Thank you so much Martin.’

According to UK law, workers are not expected to pay Income Tax on the first £12,570 earned during that year. This is called workers’ ‘personal allowance’. 

After that, workers are taxed 20 per cent on what they earn up to £50,270 – which is the basic rate.

Those on a higher rate – earning between £50,271 to £125,140 – are taxed 40 per cent of their income. The additional rate taxes 45 per cent on those earning over £125,140.

In an update shared on his website, Money Saving Expert (MSE), a journalist urged people to thoroughly check their tax to ensure they are paying the correct amount to HMRC. Stock image

People can check their tax code on their pay slips. It will appear as a series of letters and number. Examples of these may include 1257L, S1257L, C1257L, BR, and K497.

The code is used by employers or pension providers to decipher to amount of tax that is to be deducted before it is paid into the recipient’s bank account. 

However, there are some exceptions to this. For example, individuals who are self-employed, unemployed, or those who receiving only a state pension will not have an official tax code.

‘Each income you have (jobs, private pensions) will have a different tax code. Remember to check them all,’ Martin’s website advised.

Workers can find out their tax code by a number of means including a pay slip, PAYE notice (P2), P45, P60 or a pension advice slip. It can also be checked using HMRC or via the official app.

It comes after the MSE team warned that UK workers could be missing out on hundreds of unclaimed pay.

Writing on his website, Money Saving Expert (MSE), a journalist warned workers that many may be missing out on due pay – and urged employees to redeem any unclaimed cash.

They shared a story of how one 17-year-old part-time worker found themselves £240 out of pocket after discovering that they were owed hours of unclaimed holiday pay.

A worker’s tax code can be found on any pay slip or other formal work document, such as a P45, P60, or pension advice slip (Martin Lewis pictured in June)

Many part-time workers may not realise that they accrue holiday based on the number of hours they’ve worked.

If this holiday – formally known as ‘statutory annual leave’ – is not claimed, employers are obliged to remunerate the balance for any unused entitlement. 

The post described how one Essex-born 17-year-old, Lola, had been working as a kitchen porter at her local pub for over two years before she was dismissed, the owners telling her they were having to cut costs.

Her mother suggested she email the pub to request her holiday pay, and it was then that she realised she was owed £218 holiday pay, two years of backdated hours.

Delighted by the result, she then contacted a cafe where she had worked a handful of shifts where she discovered she was owed an additional £23.87 – which added up to £240.

Particularly for those who may have recently left a post, employees should ensure they check whether they are owed hours, and to redeem any unpaid pounds.

First and foremost, employees should check whether their employment status entitles them to holiday pay, since it’s not automatic for all.

For instance, those who are self-employed are likely to miss out on holiday benefits.

According to MSE, anyone who has received a pay slip is likely owed holiday. This is because it officially classifies them as an ’employee’, which entitles them to those hours of paid leave. 

Workers should check their employment status and thoroughly read through their contract to double-check the terms of the job. 

In the UK, the legal minimum holiday is 5.6 working weeks of paid holiday per year, though it is up to employer’s discretion whether they offer a higher holiday balance.

For full-time working employees working five days a week, this will equate to around 28 days of leave.

By the same measure, even those working just one day a week will equate to 11.2 days of holiday a year – which could amount to hundreds if not cashed in.