HMRC sending out letters to people owed hundreds - find out if you are owed cash

HMRC is sending out letters to let people know if they've paid too much or too little tax - and you might find out that you're due a nice chunk of change.

At the end of every tax year, you should get a P800. The tax year isn't like a normal year - it starts on April 6 and ends on April 5 the next year. And a study by a company called Canada Life found that 31% of grown-ups have been on the wrong tax code, with the average overpayment being £689.

If you're owed money back, you can claim this online through GOV.UK using your Government Gateway user ID and password. If you don't claim your refund online within 21 days, HMRC will send you a cheque in the post, reports the Mirror.

Tax codes are used to show how much tax should be taken from your pay or pension - but lots of workers are put on the wrong tax code each year. You can go back as far as four tax years, so right now you can claim back as far as the 2019/2020 tax year. But from April 6 onwards, you can only 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.

The Government website has a special webpage where you can see your tax code as well - to check it online, you'll need to sign up for a free government gateway ID.

MoneySavingExpert also has a free tax code calculator that you can use to get a rough idea if your tax code is correct. No tax calculator can tell you for sure if you're on the right code, but it should give you a good clue.

If you think your tax code is wrong, you can ring HMRC at 0300 200 3300 and ask them to look into it. If you discover you've not paid enough tax, you would have to pay back the money to HMRC.