HMRC sending out letters to people owed almost £700 - check if you are due money back

People could soon find out they are owed hundreds of pounds as HMRC send out letters over tax. HMRC is contacting people to tell them if they have overpaid or underpaid their tax.

You should receive a P800 at the end of every tax year, which is April 5. A survey by financial services company Canada Life found 31 per cent of adults have been on the wrong tax code, with the average overpayment being £689.

If you are due money back, you should be able to claim online through using your Government Gateway user ID and password. If you do not claim your refund online within 21 days, a cheque will be posted to you by HMRC.

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Tax codes are used to show how much tax should be deducted from your pay or pension, Mirror reports. But millions of workers are put on the wrong tax code every year.

You are able to go back four tax years, which means you can currently claim as far back as the 2019/2020 tax year. But from April 6, you will only be able to go back as far as the 2020/2021 tax year.

The most common code is 1257L for people who have one job or pension - but not everyone will be on this. To find your tax code, check your latest payslip or your P45 if you have recently quit your job.

You can also check your tax code her onGOV.UK. You will need to register for a free government gateway ID to be able to check it online.

MoneySavingExpert has a free tax code calculator that you can use to get a rough guideline on whether yours is correct. No tax calculator will be able to tell you for definite if you are on the right code.

If you believe your tax code is wrong, you can contact HMRC on 0300 200 3300.