Two letters instructing a payroll to deduct no income tax whatsoever — not the basic rate, not an emergency rate, nothing. It is the most valuable code HMRC issues, and the one it is least willing to issue without being asked properly.
Most tax codes are instructions about how much allowance to spread across the year. NT is different in kind: it tells the payroll operator to run the payment through with no income tax at all. There is no number, because there is nothing to apportion.
People encounter it in two situations, and confuse them constantly. One is genuine non-residence, where a treaty or the residence rules mean the UK has no claim on the payment. The other is a UK pension being paid to someone living abroad under a treaty that gives the taxing right to their new country. The application route differs, and so does the evidence required.
Who NT Is Actually For
- Employees who have left the UK and continue to be paid through a UK payroll for duties performed entirely abroad. The UK does not tax work physically done overseas once you are non-resident — but the payroll will keep deducting until it is told otherwise.
- Recipients of UK pensions living in a treaty country where the treaty allocates the taxing right to the country of residence. Note that government service pensions frequently go the other way and remain taxable in the UK.
- Certain other treaty-protected payments, decided case by case on the wording of the specific agreement.
Who it is not for is just as important. NT is not a way of stopping tax on UK workdays, UK rental profits, or any other genuinely UK-source income. If you are non-resident but spend time working physically in the UK, that portion stays taxable here regardless of what code your payroll is running — a point our living abroad guide maps out in full.
NT Covers Income Tax. It Does Not Touch National Insurance
This is the misunderstanding that costs people money, because it is invisible on a payslip that already looks encouraging. National Insurance runs on a completely separate set of rules from income tax, driven by where you are working and which country's social security system you belong to — not by your tax code.
An NT code can sit alongside a full National Insurance deduction quite legitimately. UK employers frequently continue deducting NI for a defined period after an employee moves abroad, and that is often correct. If you want the NI position changed as well, that is a separate conversation involving an A1 certificate or the relevant reciprocal agreement — see our remote work abroad guide. Do not assume the tax fix fixed both.
How to Get One
There is no "NT application form" as such. The code is a consequence of HMRC accepting a residence or treaty position, so the work is in establishing that position:
- Settle the residence question first. Work through the Statutory Residence Test and know which answer you are claiming and why. An application built on a residence position that does not hold up will fail, slowly.
- Notify HMRC through the right route. For most leavers that is form P85. For anyone inside Self Assessment it is the SA109 residence pages instead — and people working abroad full time for a UK employer generally need both.
- Where a treaty is doing the work, say so explicitly, naming the country and the basis. Treaty claims often require evidence of tax residence issued by the other country's authority.
- Wait, and chase. HMRC issues the code to your employer or pension provider directly. Nothing changes until that happens — your employer cannot apply NT on your say-so, however convincing your paperwork.
The Gap Between Leaving and the Code Arriving
Almost everyone overpays for a period, because payroll carries on with the old code until HMRC replaces it. That is not a mistake by anyone; it is how PAYE is designed to behave.
| Stage | What payroll deducts | Where the money goes |
|---|---|---|
| Before you notify HMRC | Normal UK tax on your existing code | Overpaid, recoverable later |
| Notification in progress | Still the old code | Still accumulating |
| NT code issued | No income tax | Correct going forward |
| Settling up | — | Refund via P85 claim or Self Assessment |
The overpayment is not lost, but it is not automatic either — it comes back through the P85 refund process or your return. Leaving part-way through a tax year usually creates a refund on top of this, purely from the way PAYE spreads allowances; that arithmetic is worked through at three salary levels in our P85 guide.
Checking the Code Is Right
When the code lands, verify three things on the next payslip: that the code shown really is NT rather than a zero-allowance code like 0T, that income tax has genuinely gone to nil, and that NI is behaving the way you and your employer expect. Our tax codes guide explains the letters, and the payslip guide covers where each figure appears.
And when you come home, the code has to be unwound. An NT code left running after you resume UK residence produces an underpayment rather than a refund — a far less pleasant discovery. See moving back to the UK.
Frequently Asked Questions
What does an NT tax code mean?
It instructs your employer or pension provider to deduct no UK income tax from the payment at all. Unlike other codes it carries no number, because there is no allowance to spread across the year.
How do I get an NT tax code?
Indirectly — by getting HMRC to accept your non-residence or treaty position, usually via form P85 or the SA109 residence pages. HMRC then issues NT to your payroll. There is no standalone NT application form.
Does an NT code stop National Insurance too?
No. NT applies to income tax only. National Insurance follows separate rules based on where you work and which social security system applies, so NI can continue in full alongside an NT code.
Can my employer just apply NT if I ask?
No. Employers must operate the code HMRC issues. Until the NT code is sent to them, they are required to keep deducting under your existing code however clear your situation seems.
What if I overpaid before the NT code arrived?
The overpayment is reclaimed through the P85 process or your Self Assessment return, not refunded automatically. Leaving mid-year usually creates an additional refund from the way PAYE spreads allowances.
Does NT mean I pay no tax anywhere?
No — it means the UK is not taxing that payment. Your country of residence will normally tax it instead, which is precisely why the treaty allocated the right to them.
Related Guides
Keep reading with these related guides:
- Form P85: Leaving the UK — the notification that usually triggers the code
- UK Tax for Non-Residents — allowances and UK-source income once you have left
- Double Taxation Treaty Relief — the treaty logic behind an NT claim
- How to Become Non-Resident — the residence position you must establish first
- Moving Back to the UK — unwinding the code on return
- How Tax Codes Work — every other code and what it means
- All Tax Guides
Check your take home pay
See exactly what you'll earn after tax with our free calculator.
Calculate Your Take Home Pay →