If you’ve ever stared at a Payslip or a P60 and felt lost, you’re not alone. HMRC (Her Majesty’s Revenue and Customs) is the government department that collects tax, processes benefits and keeps the UK’s finances running. Knowing the basics saves you time, avoids penalties and can even put money back in your pocket.
The first step is to set up a personal tax account online. It’s free, takes about five minutes and gives you a dashboard where you can see your tax coding, view your PAYE details and check any refunds you might be owed. Once you’re logged in, make sure your personal details – address, National Insurance number and marital status – are up to date. Small errors can cause the wrong tax code to be applied, which means you either overpay or underpay.
Next, understand your tax year. It runs from 6 April to 5 April the following year. Anything you earn, sell or receive as a benefit during that period is potentially taxable. If you’re employed, your employer usually handles deductions through PAYE. If you’re self‑employed or have side‑hustles, you’ll need to file a Self‑Assessment tax return each year, usually by 31 January.
One of the most frustrating problems is getting the wrong tax code. A code that’s too low means you pay extra each month; a code that’s too high can land you with a bill later. If you spot a mistake, log into your account, use the ‘Check your tax code’ tool and, if needed, submit a correction request. HMRC usually replies within two weeks.
Refunds are another hot topic. Many people don’t claim a refund because they assume they’re not eligible. You can claim if you’ve overpaid through PAYE, if you’ve changed jobs, or if you’ve moved abroad and stopped paying UK tax. The online refund form is straightforward – just enter the amount you think you’re owed and attach supporting documents if asked.
Late filing penalties can hit hard. The cost starts at £100 if you miss the deadline, then rises each month. If you’re struggling, contact HMRC ASAP. They may grant an extension or set up a payment plan. Ignoring the notice only makes the problem bigger.
Finally, keep good records. Save payslips, invoices and bank statements for at least five years. Good paperwork makes it easier to answer HMRC queries, proves your income if you apply for a mortgage, and can speed up refunds.
Managing HMRC doesn’t have to be a nightmare. By setting up your online account, checking your tax code, claiming refunds when they’re due, and staying on top of deadlines, you’ll stay in the clear and keep more of what you earn. Got a specific question? The HMRC help centre is searchable, and the phone line is available for more complex issues – just have your National Insurance number handy.
HMRC warns UK savers with more than £3,500 in savings about potential tax liabilities on interest exceeding Personal Savings Allowances. Basic-rate taxpayers get £1,000 tax-free interest, while higher-rate payers have £500. Exceeding limits triggers taxation. Savers should track accounts, consider tax-free options, and report accurately to avoid unexpected tax bills.
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