Martin Lewis issues HMRC tax code warning to all households | Personal Finance | Finance

Money expert Martin Lewis is urging households to check their tax code before Monday or face losing money that they will never be able to claim back.

From Monday, April 6, the new tax year for 2026-27 will begin. With that, various changes from Cash ISA limits to state pension payments to tax charges will change.

One key change is that a previous tax year, 2021-22, will no longer be accessible. Normally, you get four years to backdate any claims for previous tax years, including tax allowances, and to claim for any overpaid tax you may be owed.

But after Monday, the 2021-22 tax year will be closed for good, and you won’t be able to back-claim any tax you’re owed, even if you overpaid and should be given some money back.

Returning on the latest episode of The Martin Lewis Money Show Live on ITV1 on Thursday, March 26, Martin warned that time is rapidly running out to check and backdate any claims for overpaid tax.

Speaking on the Martin Lewis show episode, Martin warned: “Tax codes. Urgently check if yours is, or especially was, correct for 2021-2022.

“So the tax code tells your employer or the pension firm what tax to take off you. Millions are wrong each year, you may have overpaid tax and be due thousands of pounds tax, and you need to do it quickly for the 2021-22 tax year.

“Crucially, it is YOUR responsibility to check that it is right, it is not HMRC’s, it is not your employer’s, legally, even though it is tricky and difficult and that’s really weird, it is your responsibility.”

Martin set out that viewers can use free tax checkers online to see if you could be owed some overpaid tax.

He added: “There are free tax code calculators online. But just to give you a quick snip of it, this is the most typical tax code in the UK right now: 1257L.

“You’ll be sent this. Now the letters are really difficult, you’ll need to go and use a calculator in most cases to go and work out what the letters mean.

“But the numbers, there’s a simple trick. Add a 0 to the end, and put a £ sign at the beginning. So that becomes £12,570, that is your tax-free Personal Allowance, the amount you can earn each year without tax, and that’s what the number with the 0 on the end tells you.”

Ellen Milner, Director of Public Policy at the Chartered Institute of Taxation, has also sounded the alarm over other tax changes taking effect from Monday.

She said: “Spring is a time of fresh starts, and for taxpayers it also marks the arrival of a new tax year and new tax rules.

“The most contentious change being made this April is bringing business and agricultural assets into the scope of inheritance tax, albeit with an additional allowance and being taxed at a lower rate. This will mean many more valuations of estates will be required. Farmers and business owners potentially in scope will need to pay careful attention to their tax planning.

“However, for many, the most significant tax event of this new tax year is the first phase of Making Tax Digital for Income Tax – bringing the government’s flagship initiative for digitalising the tax system to nearly 900,000 self-assessment taxpayers. Over the next three tax years HMRC plans to bring 2.9 million self-assessment taxpayers into the programme, requiring them to use compatible software to keep digital records and submit quarterly updates and an annual return.”