If you owe the taxman money, HMRC has the power to change your tax code to recoup any funds it's due.
This is known as "coding out" and in effect means your take-home pay is reduced - although there are limits in place that cap how much can be deducted.
The amount that can be docked from your annual earnings is £3,000 if your salary is up to £30,000 per year, rising by £2,000 for every additional £10,000 you earn annually.
There is a maximum cap of £17,000, which applies to those who earn £90,000 or above per year.
An investigation by The Telegraph last month found 134,000 people had their tax code changed over the last year, as part of plans by HMRC to recoup £54million in unpaid taxes.
This is a jump from the 74,000 debtors who saw their tax codes changed the year before.
What options do you have if your tax code has been changed?
If you do owe the taxman money, then this sum will need to be paid back.
It's best to do this as soon as possible, if you can afford to do so - but if not, then HMRC says "coding out" can be used to recover small debts.
But a spokesman told The Mirror that the changing of a tax code is usually a last resort, often for people who have refused to contact them to discuss the money owed or make a payment over a period of time.
HMRC will write to you before making changes to your tax code - and if you’ve not repaid the debt by the end of the tax year, the repayments can continue into the next year.
If you're not happy with the impact on your wages, you can contact HMRC to discuss other ways to pay off the debt.
This could involve paying the full amount up front, thereby clearing what you owe, or setting up a payment plan.
If you don't pay the money you owe, HMRC has the power to transfer the debt to a collection agency - so it's best not to let it get to this stage.
The coronavirus pandemic saw HMRC holding off on some of its traditional debt collection measures, like taking possession of items owed by debtors and selling them on, but it has now resumed these activities.
An HMRC spokesperson said: “We understand many customers are struggling financially at the moment, and are doing all we can to help them find an affordable way to pay any tax debts.
“Coding-out is a simple way of collecting small debts from individuals who have not engaged with us.
“Our criteria these cases has not changed in the last few years, but it is natural for the number of people meeting the criteria to fluctuate on a yearly basis.”
How to find your tax code
You can find your tax code on your latest payslip, or on your P45 if you have recently quit your job.
Gov.uk also has a dedicated webpage when you can see your tax code.
To check it online, you will need to register for a government gateway ID - this is free to do.
The most common code for the current tax year is 1257L for people who have one job or pension.
This means for the tax year 2021/22, you can earn £12,570 before being taxed, as this is the current personal allowance.
But not everyone should be on this tax code - for example, people who have more than one job.
