What Does My Tax Code Mean?

Understanding Your Tax Code

A UK tax code is made up of numbers and letters. The numbers represent your tax-free Personal Allowance divided by 10. For example, tax code 1257L means your Personal Allowance is £12,570 (1257 multiplied by 10, plus 9). The letter at the end tells HMRC about your situation: L is the standard code, M means you receive Marriage Allowance, N means you transfer Marriage Allowance, and T means HMRC is reviewing your circumstances. Codes starting with S apply Scottish tax rates, and codes starting with C apply Welsh tax rates. Special codes like BR, D0, and NT have no numbers because they apply a flat tax rate or no tax at all.

What to Do If Your Tax Code Is Wrong

If you believe your tax code is incorrect, you should contact HMRC as soon as possible to avoid overpaying or underpaying tax. Common reasons for incorrect tax codes include untaxed income from a previous job, benefits in kind that have been applied incorrectly, or a Marriage Allowance that has not been set up properly. You can check and update your tax code through your Personal Tax Account on the HMRC website or by calling HMRC directly on 0300 200 3300. If you have overpaid tax due to a wrong tax code, HMRC will issue a refund, usually through an adjusted tax code in the following months or as a direct payment for larger amounts. Your employer cannot change your tax code themselves as it must come from HMRC. If you have multiple jobs, each job will have a separate tax code, and only one job should include your full Personal Allowance.