How the personal allowance shows up in your tax code
HMRC communicates your personal allowance to your employer through your tax code. The conversion is straightforward: divide the allowance by ten and append the relevant letter.
For 2026/27, the standard personal allowance is £12,570. Divided by ten = 1,257. Add the letter L (the standard suffix for the full, unmodified personal allowance) and you get `1257L` — the tax code printed on most UK payslips this year.
The practical effect: PAYE spreads the £12,570 evenly across the pay periods in the year. A monthly-paid employee effectively gets one-twelfth of the allowance (£1,047.50) each month before any Income Tax is charged. A weekly-paid employee gets one-fifty-second each week (approximately £241.73).
If your personal allowance is different from the standard — because you have untaxed benefits in kind, claim the Marriage Allowance, or have prior underpaid tax being collected — the number in your tax code will be adjusted accordingly. A code of 1100L would mean your allowance has been reduced to £11,000 for that year. A K code means your allowance has been eliminated entirely and a negative adjustment is being applied — taxable pay is increased rather than reduced by the code.
When the personal allowance changes
The personal allowance has been frozen at £12,570 since the 2021/22 tax year. The Autumn Statement 2022 extended the freeze until April 2028, meaning the allowance will not increase with inflation for at least seven consecutive tax years. In practice this acts as a gradual tax rise: as wages rise with inflation but the allowance stays fixed, more income falls into taxable bands each year — a process sometimes called "fiscal drag".
Two situations cause the personal allowance to reduce from the standard amount:
- Income above £100,000. The personal allowance tapers to zero for high earners: it reduces by £1 for every £2 of income above £100,000. By the time income reaches £125,140, the personal allowance is fully gone and the effective marginal tax rate over that range is 60%. Employees in this range typically have an adjusted tax code rather than
1257L.
- Marriage Allowance. A spouse or civil partner earning less than the personal allowance can transfer 10% of their allowance — £1,260 — to the higher-earning partner. This changes the lower earner's code to
N(given allowance away) and the higher earner's toM(received extra allowance). The net saving is up to £252 a year in tax for the couple.
In Scotland, the personal allowance is the same as the rest of the UK — Scottish Income Tax rates and bands apply above it, but the allowance itself is not devolved.
Scotland
Scotland sets its own Income Tax rates and bands independently of the rest of the UK, but the personal allowance — the tax-free floor — is the same for Scottish taxpayers as it is for everyone else in the UK. So the first £12,570 of income is still tax-free in Scotland for 2026/27.
Above the personal allowance, Scottish rates differ. Scotland has more bands — Starter, Basic, Intermediate, Higher, and Top — with rates ranging from 19% to 48% in 2026/27. Verify the current Scottish bands on gov.uk, as they are reviewed at the Scottish Budget each year. Scottish employees will have an S prefix on their tax code (e.g. S1257L) to tell the employer to apply Scottish rates.
Related terms
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