Martin Lewis and Angellica Bell returned to the small screen on Monday presenting The Martin Lewis Money Show. This week was focused on mortgages as well as savings such as via the Help to Buy ISA and Lifetime ISA.
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During the episode, the financial broadcaster also explained how some people may be able to ensure they’re receiving exactly the amount they should be by checking their tax code.
“Now this is really important right now,” he began. “Because they’re sending new tax codes out in February and March for the new tax year that starts on the 6th of April.
“And what you really need to understand is it’s not your employer’s responsibility, it’s not your tax office’s responsibility. It’s your legal responsibility to check your tax code is correct.”
When asked by his co-presenter whether many were wrong, the Money Saving Expert said: “Millions each year – and it can be a nightmare.
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Martin Lewis explained what tax code 1250L meant on the Martin Lewis Money Show (Image: GETTY • ITV)
“If you underpay you can suddenly get a bill for thousands of pounds that you’ve spent.
“If you’re overpaying – well you’re not getting the taxed take-home pay that you should.”
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Mr Lewis went on to explain how a person could check a tax code, however this could prove to be quite a task for some, he pointed out.
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“It isn’t easy to be honest. The standard tax code this year is 1250L,” he said.
“But you shouldn’t be on that if you, say, have a company car or have company benefits, or have a pension coming in or have a second job.
“There are free tools online that can help you understand if your tax code is right – but it really really is worth checking.”
Mr Lewis went on to explain that one particular viewer had written into the show after checking their tax code – and subsequently saving a huge amount of money.
Martin Lewis said millions of tax codes are wrong each year – adding that it ‘can be a nightmare’ (Image: GETTY)
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Having found out they were overpaying on tax, the taxpayer received a £2,240 refund.
It’s possible to check one’s Income Tax online, using the “Check your Income Tax for the current year” service.
This tool covers the current tax year – which spans from April 6, 2019 to April 5, 2020.
The service can be used to check one’s tax code and Personal Allowance, as well as see if the tax code has changed and to tell HM Revenue and Customs (HMRC) about any changes which may affect the tax code.
It can also be used to update an employer or pension provider details, see an estimate of how much tax a person will pay over the tax year, and to check or change estimates of how much income a person will get form their job, pensions or bank and building society savings interest.
Income Tax rates around the world (Image: EXPRESS)
Elsewhere during The Martin Lewis Money Show, Mr Lewis was asked where savers could find the top paying Lifetime ISA (LISA) at the moment.
He said: “The top paying cash Lifetime ISA is Moneybox at 1.4 percent.”
Addressing options other than the cash LISA, he added: “There are also investment LISAs, but I wouldn’t tend to use those as a first-time buyer.
“They’re usually more for people who are saving for their retirement in a LISA, but I’m not the biggest fan of that. For most people, I’d stick with a pension.”
The Martin Lewis Money Show continues on Monday on ITV at 8pm.