Paying taxes on time is something all law fearing citizens do. Most of us are always worried about paying taxes on time and keep finding ways to ensure that we can pay all our dues without any issues. But little do we realize that it is possible to overpay on our taxes. The mere thought of having overpaid on their taxes makes people shiver in fright. Imagine throwing away your hard earned income by overpaying. The money experts from the Wonga.ca website have put together this article to help you determine if you’re overpaying so you can take the required steps to claiming back what is rightfully yours.
How do You End Up Overpaying Your Taxes?
There are many different reasons and situations that may lead you to overpay your taxes in error as follows:
1) If You Are Employed
The first and foremost of all is the input of incorrect tax code. Your tax code is unique to you and even the slightest error can pass on wrong info to the HM Revenue and Customs.
If you are employed and your employer makes an error in filling the tax code on the tax forms, then you could end up paying more than you actually need to. This applies both to your income and your company pension. Your employer uses your tax code to find out the exact amount of money that he / she has to deduct from your income / pension towards taxes. So make sure that the tax code is always being filled in correctly on your tax forms.
2) If You Get Bank or Building Society Interest
If you have invested some amount of money in a bank or are due to be paid interest by a building society, then check with the authorities in both places to confirm if they have been calculating your tax deductions correctly. Sometimes it may happen that you are entitled to a tax free interest / income but the bank or the building society decides to deduct tax before releasing your interest that you earned from your investments. Speaking of banks and interest, in case you need a short term loan you can get it at wonga.com
How to Avoid Overpaying Taxes?
The first thing to do in order to avoid falling into a situation where you are overpaying your tax is to always keep an eye on your tax code. Check and confirm it to be correct on your pay slip. The other places to check your tax code are your Form P 60, Form P 45 and also on your PAYE coding notice.
What To Do on Finding Your Tax Code Was Entered Incorrectly?
The first thing to do in this case is to inform the HM Revenues and Customs immediately. You will needto supply HM R and C with additional information about your National Insurance number and also your tax reference number in order to proceed with the correction process.