Consumer champion Martin Lewis has issued an urgent warning to millions of workers across the UK, urging them to verify their tax code without delay. The founder of MoneySavingExpert.com stressed that failing to do so could lead to significant financial loss or an unexpected bill running into thousands of pounds.
Why Your Tax Code Matters
Speaking on his popular BBC podcast, Lewis highlighted a critical but often overlooked annual task. Your tax code is a combination of numbers and letters used by HM Revenue and Customs (HMRC) to instruct your employer or pension provider on how much income tax to deduct. It directly controls your tax-free Personal Allowance, which for most people in the 2025/26 tax year is £12,570.
Lewis explained the mechanics using the standard code, 1257L. "Take those numbers, the 1257, add a zero to the end, so you've now got £12,570. That's how many pounds you can earn each year before you have to start paying income tax," he said. The letter denotes your tax category.
The Risk of an Incorrect Code
The core of Lewis's warning lies in the sheer scale of errors. He stated plainly that "millions of them are wrong each year." Crucially, he emphasised that the legal responsibility for ensuring your code is correct falls on you, the individual, not your employer or HMRC.
The consequences of an incorrect code are twofold and severe. Firstly, you could be paying far too much tax, effectively giving the government an interest-free loan from your hard-earned salary. Secondly, and more dangerously, you could be paying too little.
"Sounds good? It isn't," Lewis cautioned. "Because at some point they will catch up and make sure you pay the tax that you owe. So, you could be hit, slapped across the face with a big tax bill and not have the cash to pay it, which is a nightmare."
How to Take Action Now
Lewis's advice is straightforward: check your tax code every year when you receive it. If you have never checked it before, he insists it is time to start. Your tax code can be found on your payslip, your P45, or a coding notice from HMRC.
To help, there are free tax code calculators available online which can assist you in verifying if your code is correct based on your personal circumstances. Taking a few minutes to perform this check could prevent serious financial distress, ensuring you keep what you are owed and are prepared for what you legitimately owe.
With the current tax year in full swing, Lewis's message is a timely reminder for every employee to take control of their tax affairs and avoid becoming another statistic in the millions of annual coding errors.
