Some of you have, or will be getting, a letter in the post from HMRC detailing some good or bad tax news. Following a tax code blunder 4.3 million happy people will be getting a rebate, leaving 1.4 million to face a demand for extra payments, which will be deducted from their pay packets at around £100 a month from next April.

While this is unfair to the unlucky 1.4 million – ultimately this is HMRC’s mistake – what it does flag up is a general apathy when it comes to understanding tax. A recent survey conducted by HSBC shows that taxpayers are failing to check their income tax deductions and, in doing so, many are paying too little or too much. More than half of taxpayers do not know their income tax code and a third have never checked their P60.

Personal income tax allowances and current thresholds for different tax bands are also a mystery for the majority of taxpayers – 81% of adults didn’t know at what level of earning 40% tax applied, with more than half believing they had to earn far more than the actual salary threshold.

More than half of UK adults didn’t know the current personal income tax-free allowance (£6,475) and 53% of adults didn’t know that income tax is payable on employee benefits and 30% didn’t know it is payable on pension income.

David Wells, head of pensions, savings and investments at HSBC, said: ‘It is important that people know their tax code and check it with their P60 each tax year. Whether you are in full or part time employment, there is always a chance you have been overpaying in which case you can reclaim the tax. There is equally the possibility that if you have been given the wrong tax code you could be underpaying and could be faced with a large tax bill at the end of the financial year.’