Tax code

How to read a tax code

A tax code has two parts: a number and a letter (sometimes followed by an extra suffix). Read them in order.

• The number is your tax-free allowance, divided by ten. Code 1257L means £12,570 of pay is tax-free in the year. Code 1100L would mean £11,000 tax-free. The reason it's divided by ten is purely historical — HMRC kept the codes short by dropping the trailing zero.
• The letter explains the adjustment. The most common letters are:
  • L — standard personal allowance, no special adjustment.
  • M — you've received marriage allowance from your spouse (10% extra tax-free).
  • N — you've given marriage allowance to your spouse (10% less tax-free).
  • T — your code has another adjustment HMRC will explain in a P2 coding notice.
  • K — a negative allowance. You owe tax from somewhere else (taxable benefit, prior underpayment) and the code adds to your taxable pay rather than subtracting from it.
  • BR — every pound is taxed at basic rate (20%), no allowance. Common on a second job.
  • D0 — every pound at higher rate (40%). D1 is the additional rate (45%).
  • 0T — no allowance at all; tax bands apply from £1.
  • NT — no tax taken (used in narrow cases like some non-residents).
• Suffixes `W1`, `M1`, or `X` mean the code is non-cumulative — each pay period is treated in isolation rather than year-to-date. That's usually an emergency tax code HMRC will replace once it has your full picture.

Common 2026/27 tax codes and what they mean

Most UK employees see one of these on their payslip.

Scottish taxpayers see an S prefix (e.g. S1257L); Welsh taxpayers see a C prefix (e.g. C1257L). The numbers and letters work the same way; only the rate bands differ.

Why your tax code changes

HMRC reissues tax codes throughout the year as your circumstances change. The most common triggers:

• A new tax year (6 April). Codes are re-baselined so the allowance is spread evenly across the next twelve months. Even an unchanged personal allowance will produce a fresh code notice.
• Marriage allowance. Transferring 10% of the allowance to a spouse changes both partners' codes to N and M respectively.
• Taxable benefits in kind. A company car, private medical cover, or other employer-provided benefit reported on a P11D reduces your tax-free pay — HMRC adjusts the number downward, or in extreme cases issues a K code.
• Starting a new job without a P45. Until HMRC has the full picture, your new employer applies an emergency code (1257L W1/M1). Once HMRC has reconciled, a corrected cumulative code follows.
• HMRC reconciling an underpayment. If too little tax was collected in a previous year, HMRC can recover it by lowering your allowance in the current year rather than asking for a one-off payment.

What to do if you think your code is wrong

Until HMRC issues a different code, your employer must use the code HMRC has sent them — even if you're sure it's wrong. The fix has to come from HMRC's side.

1. Check your [Personal Tax Account](https://www.gov.uk/personal-tax-account) on gov.uk. It shows the code HMRC currently has on file and the reasoning behind it.
2. Call HMRC on 0300 200 3300 (or use the online chat) if the account view doesn't explain the change.
3. Wait one or two paydays after HMRC confirms a correction — the new code reaches your employer through an electronic notice (P6 / P9) which payroll picks up on the next run.

Any over- or under-payment caused by a wrong code washes through automatically: cumulative codes correct themselves in the next pay period after the new code arrives.

Related terms