What is a ‘personal allowance’?

This is the amount of money you can earn before you pay any tax. For most people it is £12,570 per tax year.

How do I check if my tax code is correct?

You can check your tax code on your payslip, P60, or through your personal tax account online. It’s worth comparing it to your situation (income, job changes, benefits) to make sure it lines up properly.

Who decides my tax code in the UK?

Your tax code is set by HM Revenue and Customs (HMRC). They use information about your income and circumstances to calculate how much tax should be applied.

Can I have more than one tax code at the same time?

Yes, if you have multiple jobs or income sources, you can have different tax codes for each. Usually, your main job gets your personal allowance, and the others may be taxed at a flat rate.

How often does my tax code update?

There’s no fixed schedule. Your tax code can change whenever HMRC receives new information about your income or circumstances, such as a job change or added benefits.

What should I do if my tax code is wrong?

If something doesn’t look right, you can contact HMRC directly or update your details through your online tax account. Fixing it sooner rather than later can help avoid overpaying or underpaying tax.

Will I get a refund if I’ve been on the wrong tax code?

In many cases, yes. If you’ve overpaid tax due to an incorrect code, HMRC will usually issue a refund once the issue is corrected or at the end of the tax year.

Can my tax code affect my take-home pay immediately?

Yes, a change in your tax code can impact your take-home pay straight away, depending on how your employer processes payroll.

Why have I been put on an emergency tax code?

This usually happens when HMRC doesn’t have enough information about your income, often after starting a new job. It’s typically temporary until your details are updated.

Do tax codes apply to pensions as well as salaries?

Yes, tax codes are used for both employment income and pension income to ensure the correct amount of tax is deducted.

Can I change my tax code myself?

You can’t directly change your tax code, but you can update your details with HMRC, which may result in your code being adjusted accordingly.

Does my State Pension have a tax code?

No. But it is taxable. So if you still work and you receive the State Pension as well, you may have additional tax to pay.

UK Tax Codes Explained

The Most Common Codes and What They Mean

What is a tax code?

Your tax code is used by your employer or pension provider to work out how much tax should be taken from your income. It’s based on things like your personal allowance, any benefits you receive, and whether you’ve got more than one source of income.

The short version: While it looks a bit random, it’s basically a set of instructions telling the system how to tax you (slightly less mysterious now).

The most common UK tax codes

There are quite a few tax codes out there, but a handful come up again and again. These are the ones most people tend to see.

1257L

This is the standard tax code for most people. It usually means you’re getting the basic personal allowance with no major adjustments.

1263L
1269L
1271L

These are slight variations of the standard code. They normally mean your personal allowance has been tweaked slightly, often due to Flat Rate Job Expenses.

BR

This means all your income is being taxed at the basic rate. It often shows up if you’ve got a second job or another source of income.

D0

This means all your income is being taxed at the higher rate. Again, pretty common if you’ve got more than one income stream.

1383M

This means you are receiving 10% of your partner’s personal allowance on top of the standard personal allowance.

1131N

This means you are transferring 10% of your personal allowance to your partner from the standard personal allowance.

Other tax codes worth knowing

You might not come across these as often, but when you do, they can have a noticeable impact.

D1

All income is taxed at the additional rate

0T

No personal allowance is applied, so everything gets taxed. This can pop up if your details are incomplete or still catching up in the system. Or if you earn over £125,140.

NT

No tax is being taken at all. Less common, and usually linked to specific situations like working overseas.

K codes

No tax is being taken at all. Less common, and usually linked to specific situations like working overseas.

Your Tax-Free Amount

How can you work out your personal allowance? Well, as a general rule of thumb, there’s a quick shortcut to see how much you earn before you start paying tax.

Rule of Thumb

Remove the last letter of your tax code and replace it with a 0.

Example

1257L = £12,570

This is the amount you earn before tax.

What do the letters in your tax code mean?

The letters aren’t just there for decoration. They each tell you something about how your tax is being worked out.

L

You’re receiving the standard personal allowance

M

You’re receiving a transferred allowance from your partner

N

You’re transferring some of your personal allowance to your partner

T

Your tax code includes other calculations that need reviewing

C

Your tax is based on Welsh rates

S

Your tax is based on Scottish rates

BR / D0 / D1

Your income is taxed at a fixed rate

Once you know what the letters mean, the whole thing starts to feel a lot less random

What about W1, M1 or X?

These are the ones that tend to catch people out. If your tax code includes W1, M1, or X, it usually means you’re on an emergency or temporary tax code.

In simple terms, your tax is being worked out just for that specific pay period, rather than across the full tax year.

It’s not always a problem, but it’s worth keeping an eye on if it sticks around longer than expected.

Why your tax code might change

Your tax code isn’t set in stone. It can change whenever your circumstances do. Some common reasons include:

Starting a new job

Having more than one source of income

Receiving benefits or perks through work

Updates from HMRC

Most of the time, these changes are completely normal. It’s just the system adjusting to what’s going on in your world.

When it's worth a quick check

You don’t need to check your tax code every five minutes, but there are moments where it’s worth a quick look.

It takes a couple of minutes, and could save you from paying more tax than you need to (which no one’s signing up for).

Understanding your tax code

So… what does this actually mean for you?

Tax codes aren’t as complicated as they first seem. Once you break them down, they’re just a way of making sure the right amount of tax is taken from your income.

You don’t need to memorise every code (no one is expecting that), but having a rough idea helps you spot when something doesn’t quite look right.

If something does feel off, it’s always worth checking. A quick look could make more of a difference than you think.

FAQs

Got Questions? We've Got Answers

What is a ‘personal allowance’?
This is the amount of money you can earn before you pay any tax. For most people it is £12,570 per tax year.
How do I check if my tax code is correct?
You can check your tax code on your payslip, P60, or through your personal tax account online. It’s worth comparing it to your situation (income, job changes, benefits) to make sure it lines up properly.
Who decides my tax code in the UK?
Your tax code is set by HM Revenue and Customs (HMRC). They use information about your income and circumstances to calculate how much tax should be applied.
Can I have more than one tax code at the same time?
Yes, if you have multiple jobs or income sources, you can have different tax codes for each. Usually, your main job gets your personal allowance, and the others may be taxed at a flat rate.
How often does my tax code update?
There’s no fixed schedule. Your tax code can change whenever HMRC receives new information about your income or circumstances, such as a job change or added benefits.
What should I do if my tax code is wrong?
If something doesn’t look right, you can contact HMRC directly or update your details through your online tax account. Fixing it sooner rather than later can help avoid overpaying or underpaying tax.

Will I get a refund if I’ve been on the wrong tax code?
In many cases, yes. If you’ve overpaid tax due to an incorrect code, HMRC will usually issue a refund once the issue is corrected or at the end of the tax year.
Can my tax code affect my take-home pay immediately?
Yes, a change in your tax code can impact your take-home pay straight away, depending on how your employer processes payroll.
Why have I been put on an emergency tax code?
This usually happens when HMRC doesn’t have enough information about your income, often after starting a new job. It’s typically temporary until your details are updated.
Do tax codes apply to pensions as well as salaries?
Yes, tax codes are used for both employment income and pension income to ensure the correct amount of tax is deducted.
Can I change my tax code myself?
You can’t directly change your tax code, but you can update your details with HMRC, which may result in your code being adjusted accordingly.
Does my State Pension have a tax code?
No. But it is taxable. So if you still work and you receive the State Pension as well, you may have additional tax to pay.