Tax Code FAQs: Every Common Question Answered

A tax code is a short run of numbers and letters, such as 1257L, that HMRC gives to your employer or pension provider. It tells them how much of your income is tax-free and which rates to apply to the rest.

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On your payslip, on a P45 or P60, on a Tax Code Notice letter from HMRC, and in the HMRC app or your online tax account. Each job or pension has its own code.

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The number 1257 means £12,570 of tax-free pay a year (multiply by ten), which is the standard Personal Allowance. The letter L means you are entitled to that standard allowance. GOV.UK says it is the code used for most people who have one job or pension.

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HMRC starts with your Personal Allowance and takes off income you have not paid tax on, such as untaxed interest, and other deductions, such as company benefits. It then replaces the final digit with a letter. If the deductions are bigger than your allowance, you get a K code instead.

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You have one for every job and pension that pays you through PAYE. The tax-free allowance is normally used against one of them, and the others are typically given a code such as BR.

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No. The category letter on your payslip, such as A, affects your National Insurance. Your tax code affects only Income Tax.

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No. HMRC sets your code from the information it holds about your income and benefits, and your employer must use it. If the code is wrong, the information behind it needs correcting.

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L means you are entitled to the standard tax-free Personal Allowance. It is the most common letter.

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They relate to Marriage Allowance, which moves 10% of one partner's Personal Allowance to the other. M means you have received a transfer, so a typical code is 1383M. N means you have transferred some of your allowance to your partner, so a typical code is 1131N.

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BR means all your income from that job or pension is taxed at the basic rate, and no tax-free allowance is given. It is usually used when you have more than one job or pension and your allowance is being used elsewhere.

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D0 means all income from that job or pension is taxed at the higher rate, and D1 means it is taxed at the additional rate. They are usually used when you have more than one job or pension.

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0T means no tax-free allowance has been applied. It is used when your Personal Allowance has been used up, or when you have started a new job and your employer does not have the details needed to give you a code. Your pay is taxed from the first pound using the normal bands.

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NT means you are not paying any tax on that income. It is only used in specific situations, so if you see it and do not know why, check with HMRC.

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A K code means you have untaxed income or deductions that are higher than your Personal Allowance. The number is added to your pay before tax is worked out, instead of being subtracted. Employers and pension providers cannot take more than half of your pre-tax pay when using a K code.

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A prefix of S means your income or pension is taxed using the rates in Scotland, for example S1257L. Scottish versions of the BR and D codes also exist, such as SBR, SD0 and SD1.

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A prefix of C means your income or pension is taxed using the rates in Wales, for example C1257L. Welsh versions of the other codes exist too, such as CBR and C0T.

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It is a temporary code used when your employer or pension provider does not have all the details they need. Your tax is worked out on what you are paid in that week or month only, as if you were paid that amount every period of the year, so you can pay the wrong amount.

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Your code ends in W1, M1 or X, for example 1257L W1 or 1257L M1. W1 is used when you are paid weekly, M1 when you are paid monthly and X when your pay dates vary. Some payroll software shows NONCUM instead.

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The usual reason is starting a new job without a P45 or without your previous income and tax details reaching HMRC. You can also be put on one when you start getting company benefits or the State Pension.

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It is usually temporary. HMRC normally updates your code once it has your details, which GOV.UK says can take up to 35 days from when you start a job. If you have not paid enough tax, you stay on it until you have paid the right amount for the year.

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If you have paid too much tax, you can get a refund. Often that happens through your pay once the correct code is used, and otherwise you can claim it from HMRC.

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The allowance is the same, but W1, M1 and X mean your tax is calculated on that single period rather than on your total income so far in the year. That is why emergency codes can take too much or too little tax.

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Give your new employer the P45 from your last job, or ask your previous employer for one if you did not get it. Check your details in the HMRC app or online account too. HMRC then sends a new code to you and your employer.

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HMRC has usually received new information. Common reasons are a pay rise or other income, a new company benefit such as a car or medical insurance, a second job or pension, tax owed from an earlier year, or starting or stopping Marriage Allowance.

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Something has been taken off your allowance. That is often a company benefit, tax owed from a previous year, or untaxed income such as savings interest above your allowance. Earning over £100,000 also reduces the Personal Allowance, which lowers the code.

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You may have extra allowances or relief added, such as Marriage Allowance received (an M code) or tax relief on work expenses. Check it in your HMRC account to see how it was built up.

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HMRC usually contacts you to explain how it worked out your code when it changes. You can also sign up for paperless notifications in your online account and check your code at any time.

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No. Employers and pension providers must use the code HMRC gives them. Ask HMRC to correct the information behind it, not your employer.

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It can change at any point in the tax year, and many people are given an updated code for the new year. If your circumstances have not changed, you will often stay on the same code, such as 1257L.

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Usually not, but it is worth checking that the new code matches your circumstances. If it looks wrong, update your details in the HMRC app or online account.

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Your tax-free allowance is normally used against your main job or pension. Income from the second source is then taxed at the basic rate on a BR code, with no allowance.

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HMRC decides, and it is usually the main source of income. Check the codes on each payslip in your HMRC account, and contact HMRC if you think the allowance is in the wrong place.

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D0 taxes everything from that job at the higher rate. It is used when your total income means the second income falls in the higher rate band.

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Yes. Workplace and private pensions that are paid through PAYE have a code. The State Pension is paid without tax taken off, so any tax due on it is usually collected through the code on another pension or job.

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Yes. Enter your code and salary in our tax code calculator to see the Income Tax each year, month and week. It covers Income Tax only, not National Insurance or other deductions.

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Not for self-employed profits. You report those and pay tax through Self Assessment. A tax code only applies where an employer or pension provider takes tax through PAYE.

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Your Personal Allowance reduces by £1 for every £2 of income over £100,000, so your code will be lower than 1257L. Once your income reaches £125,140 the allowance is gone.

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If you give your new employer a P45, they use the code on it. If you do not have one, you complete a starter checklist and may be put on an emergency code until HMRC sends the right one.

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It is the code your last employer was using when you left. Your new employer uses it until HMRC provides an updated one.

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If you overpaid because of a wrong code, the refund is usually made through your pay once the correct code is in place. If you have left the job or the tax year has ended, HMRC may repay you, or you can claim.

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Sign in to the Check your Income Tax service or the HMRC app, check your jobs, pensions, estimated income and benefits, and correct anything that is wrong. HMRC then issues a new code if one is needed. If you cannot use the service, contact HMRC.

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HMRC tells you and your employer within 15 working days. If you are paid monthly it should appear on your next or following payslip. If you are paid weekly it should appear on your third payslip.

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HMRC, not your employer. Use your online account or app first, then phone HMRC if needed. If you started a job recently, GOV.UK advises waiting 35 days for HMRC to receive your income details before you call.

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It changes from the payslip on which the new code is used. If you overpaid earlier in the year, the catch-up refund can make that payslip higher than usual. If you underpaid, HMRC typically collects it by adjusting your code.

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