What Is a Tax Code?
Your tax code tells your employer how much tax-free income you're entitled to. It's used to calculate how much income tax to deduct from your pay each month. Getting it wrong means you'll pay too much or too little tax.
The Most Common Tax Code: 1257L
The vast majority of UK employees have the tax code 1257L. Here's what it means: the number 1257 represents your tax-free allowance divided by 10 (£12,570 ÷ 10 = 1257). The letter L means you're entitled to the standard personal allowance.
Tax Code Letters
| Letter | Meaning |
|---|---|
| L | Standard personal allowance |
| M | You've received Marriage Allowance from your spouse |
| N | You've transferred Marriage Allowance to your spouse |
| T | HMRC needs to review your code (other items to check) |
| BR | All income taxed at basic rate 20% (usually second job) |
| D0 | All income taxed at higher rate 40% |
| D1 | All income taxed at additional rate 45% |
| NT | No tax deducted |
| 0T | No personal allowance (used when HMRC doesn't have enough info) |
| K | You owe tax that can't be collected elsewhere, so allowance is reduced |
W1 and M1 — Emergency Tax
If your tax code has W1 (weekly paid) or M1 (monthly paid) at the end, you're on emergency tax. This means your employer isn't using the cumulative method — they're only looking at your current pay period, not the whole year. You'll often overpay tax in this situation. It usually sorts itself out once HMRC sends your correct code, and you'll get any overpayment back.
How to Check Your Tax Code
You can check your tax code on your payslip, your P60 (end of year), through your HMRC personal tax account online, or on the HMRC app. If your code seems wrong, contact HMRC on 0300 200 3300.
Common Reasons for a Wrong Tax Code
Starting a new job without a P45, having two jobs, company benefits (car, medical insurance) being added or removed, student loan starting or ending, marriage allowance changes, or HMRC having outdated information about your employment.
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