Why it’s important to check your tax code in 2025 – Avoid overpaying HMRC

If you’ve ever wondered “Should I check my tax code?”, the answer is yes—especially in 2025. Understanding and reviewing your HMRC tax code regularly is essential to avoid paying too much or too little Income Tax. With recent tax code errors and updates from HMRC, it’s more important than ever to check that your tax code is correct. In this article, we explain what your tax code means, why it might change, and how to check and update it using your HMRC personal tax account or app.

Should you check your tax code regularly?

It’s all too common for employees to overlook their payslips, focusing only on the amount that lands in their bank account. While payroll teams take great care to process information accurately, they rely on data provided from various sources and one particular example is HMRC. This means mistakes can happen, especially with your tax code.

Why your tax code matters?

Your tax code plays a vital role in determining how much tax is deducted from your salary. It is unique to your individual circumstances and outlines your personal allowance. It reflects the amount of income you can earn before tax becomes due.

Your personal allowance can be split across different sources of income or adjusted for taxable benefits, other reliefs, or unpaid tax from previous years. If you earn over £100,000, it may be restricted. A wrong tax code could mean you pay too much or too little tax.

To better understand how tax codes work and what yours means, visit our guide:

How do tax codes work & what do they mean? – Rayner Essex

When you should check your tax code?

We strongly recommend that all employees check their tax code at the start of each tax year, or whenever there is a change in their circumstances. Events like starting a new job, when P11D’s have been submitted or when income changes, such as salary increases or bonus payments are key triggers to check.

You can check your tax code by:

• Downloading the HMRC app, or
• Logging in to your Personal Tax Account via the HMRC website

These platforms will show your current tax code, how your personal allowance is calculated, and whether any adjustments have been made.

Understanding how to check your tax code in 2025 can help ensure you’re not paying more tax than you should. This also gives you the chance to correct any errors early.

Recent HMRC technical issue

It’s especially important to check your tax code this year. HMRC recently reported a technical issue that prevented tax code updates from reaching employers between 25 May and 11 June 2025.

This affected some employees whose tax codes should have changed in their May or June payrolls. HMRC has since resolved the issue and re-issued the tax code notices. It has since advised employers and agents to update payroll systems as soon as possible to ensure tax codes are correct ahead of the next pay run. As your payroll provider and PAYE agent, Rayner Essex LLP we will update the tax code when we run the next payroll.

Most affected employees will see any under – or overpayments corrected automatically in upcoming payrolls. However, a small number might receive a further tax code adjustment later in the tax year to make final adjustments.

What to do if you’ve been affected

Employee’s may be eligible for financial redress if they believe they have been affected by this issue, and have suffered financial hardship as a direct result of this technical issue. HMRC will prioritise cases and more information about how to claim can be found here: Complain about HMRC – GOV.UK

Get in touch

While it’s easy to assume that everything is running smoothly behind the scenes, taking a few moments to check your tax code yourself can help you avoid unnecessary tax issues. If you’re unsure or have any questions relating to your payroll or would like to consult our payroll services for your business needs, our Rayner Essex team is here to help.