Do you understand what your tax code really means? If not, you’re not alone. Millions of UK taxpayers could be on the wrong code and overpaying tax without even knowing it. In this guide, we demystify List of Tax Codes and What They Mean, so you can take control of your payslip and keep more of your earnings. Every code, from “1257L” to “K475,” is explained in this A-Z breakdown along with its meaning and how it impacts your revenue.
What is a tax code?
An HMRC-issued set of numbers and letters known as a tax code tells your employer or pension provider how much income tax should be withheld from your pay cheque. It reflects your tax-free allowance and any adjustments based on benefits or past tax obligations.
- Tax codes ensure you’re taxed correctly in line with your earnings and allowances.
- They help HMRC collect the right amount of tax throughout the year, avoiding large bills later.
- Your tax code may change if your income, employment, or benefits change.
What does a tax code mean?
- Numbers in the tax code represent your personal allowance, usually divided by 10. For example, 1257L indicates that you may make £12,570 before taxes.
- Letters reflect additional circumstances:
- L – standard tax-free allowance
- M/N – Marriage Allowance recipient or transfer
- T – additional calculations needed
- K – deductions exceed allowance
What is the most common tax code?
The majority of employees use the most popular UK tax code, 1257L. It means you are entitled to the full personal allowance of £12,570 for the 2024/25 tax year.
- It applies if you have only one job or pension without other income complications.
- It assumes you’re entitled to the full standard personal allowance without adjustments.
Where can I find my tax code?
You can check your tax code on:
- Your payslip
- A P60 (year-end summary)
- A P45 (when leaving a job)
- Your tax code notice (P2)
- The HMRC app or personal tax account
What happens if I have the wrong tax code?
Overpaying or underpaying taxes might result from using the wrong tax code. If you think your code is wrong:
- Contact HMRC online or by phone
- Log into your personal tax account to view or update your details
Why do I have more than one tax code?
You might have multiple tax codes if:
- You have several sources of income or jobs.
- You receive both a salary and a pension
- Your personal allowance is distributed among several sources of income.
HMRC allocates your full personal allowance to your main job, and your secondary income may be taxed at BR, D0, or D1 without allowance.
How do tax-free allowances affect my tax code?
The amount of income subject to taxes is decreased by your personal allowance. This is represented in your tax code (e.g. 1257L = £12,570).
- If you receive other reliefs (e.g. Marriage Allowance, Blind Person’s Allowance), HMRC adjusts your tax code accordingly.
- Taxable benefits or underpayments from previous years can also alter your code.
- These adjustments help HMRC collect the correct amount over time. You might have multiple codes if:
- You have more than one job
- You receive a pension in addition to earnings
- Your personal allowance is split across incomes
What is an emergency tax code?
Temporary emergency tax codes are W1, M1, and X. They’re used when HMRC doesn’t have enough information to assign a correct code, like when starting a new job without a P45.
What do K tax codes mean?
If your deductions surpass your personal allowance, you have a K code. HMRC adds extra tax to recover debts or account for untaxed income.
What do S and C tax codes mean?
- Scottish income tax bands are reflected in S codes, which are for Scottish taxpayers.
- C codes adhere to Wales-specific bands and are intended for Welsh taxpayers.
What are all the UK tax codes?
| Tax Code | Meaning | Explanation |
|---|---|---|
| 1257L | Standard personal allowance | You can earn £12,570 tax-free. Most people with one job have this code. |
| L | Full personal allowance | Entitles full standard allowance. Appears with 1257 to form 1257L. |
| M | Marriage Allowance received | You received 10% of your partner’s personal allowance. |
| N | Marriage Allowance transferred | You transferred 10% of your allowance to your partner. |
| T | Complex tax situations | HMRC needs extra checks; allowance might vary. |
| 0T | No personal allowance | All income is taxed. Often used when changing jobs without a P45. |
| BR | Basic Rate only (20%) | All earnings taxed at 20%. Used for second jobs or pensions. |
| D0 | Higher Rate only (40%) | Income taxed at 40%. Used for high earners or extra jobs. |
| D1 | Additional Rate (45%) | All income taxed at 45%. For top earners or second income sources. |
| NT | No Tax | No tax is deducted. Used for non-residents or some exempt roles. |
| K | Negative tax-free allowance | Benefits/tax owed exceed allowance. You’re taxed more to recover owed tax. |
| W1/M1 | Emergency tax on current period | Tax calculated only on weekly/monthly earnings. Temporary. |
| X | Non-standard pay period | Emergency basis used if pay frequency doesn’t match week/month. |
| S1257L | Scottish standard allowance | Scottish version of 1257L. Follows Scottish income tax bands. |
| SBR | Scottish Basic Rate | Income taxed at Scottish basic rate. No allowance used. |
| SD0/SD1/SD2 | Scottish higher rates | 21%, 41%, or 46% tax rates, depending on band. Used for second incomes. |
| S0T | No allowance, Scottish | Scottish code with no personal allowance. |
| C1257L | Welsh standard allowance | Welsh equivalent of 1257L. Follows Welsh rates. |
| CBR | Welsh Basic Rate | Income taxed at 20% in Wales, no allowance. |
| CD0/CD1 | Welsh higher/additional rates | 40% or 45% tax on all earnings. Used for second jobs in Wales. |
| C0T | No allowance, Welsh | Welsh version of 0T. Used when no personal allowance applies. |
Conclusion
Understanding your “List of Tax Codes and What They Mean” is crucial to ensure you’re paying the correct amount of tax. By checking your code and knowing what each part means, you can avoid unexpected tax bills and stay compliant. Always confirm your tax information using official HMRC sources.
Need help with your tax code or refund? For further information, get in touch with HMRC or access your personal tax account.
FAQs
What should I do if I think my tax code is wrong?
Log in to your HMRC personal tax account to view your current code and check for errors. You may change your information or give HMRC a call if it’s inaccurate.
Can I reclaim overpaid tax due to a wrong code?
Yes, you can. HMRC will automatically issue a refund or adjust your future tax code. You may also receive a P800 tax calculation letter.
Why has my tax code changed mid-year?
Your code may change if you’ve changed jobs, started receiving a new income, or claimed additional tax reliefs.
Do student loans or benefits affect my tax code?
No, student loans are managed separately through payroll deductions. However, your tax code may be impacted by taxable advantages like corporate automobiles.
Is it possible to have a K code and a second job?
Yes, K codes can be applied alongside other codes depending on your financial situation. HMRC will guarantee total deductions don’t exceed 50% of your income.
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I’m Adam Milne, a business writer and co-author at UKBusinessMag.co.uk. I’m passionate about simplifying complex topics—whether it’s tax, startup strategy, or digital marketing—so that entrepreneurs can take action with confidence. With years of experience in small business consultancy, I bring a practical perspective to every piece I write, helping readers turn ideas into results.
