UK Tax Codes: What They Mean and How to Check Yours

UK tax codes

Understanding your UK tax code is essential if you’re employed or receiving a pension in the United Kingdom. Yet, many people never question the string of numbers and letters found on their payslip. This can lead to overpayments or underpayments of income tax—both of which can be avoided with a basic understanding of how tax codes work.

In this guide, we’ll break down:

  • What UK tax codes mean
  • How HMRC calculates them
  • How to check and correct your tax code
  • Common errors and special cases
  • Where to get help and resources

By the end, you’ll feel confident reading your payslip and understanding what your UK tax code tells HMRC about your personal tax situation.

1. What Is a UK Tax Code?

A UK tax code is used by your employer or pension provider to determine how much Income Tax should be deducted from your pay or pension. Issued by HMRC (His Majesty’s Revenue and Customs), this code reflects your tax-free allowance and any adjustments due to your individual circumstances.

Most people in the UK receive a tax-free personal allowance each tax year, which is reflected in their tax code.


2. How UK Tax Codes Work

UK tax codes are usually a combination of numbers and letters. The numbers tell your employer how much tax-free income you can earn in a tax year, while the letters provide information about your circumstances.

Example:

1257L is the most common tax code for the 2024/25 tax year. Here’s what it means:

  • 1257 refers to the standard personal allowance of £12,570
  • L means you’re entitled to the standard tax-free allowance

Multiply the number by 10 to get the total tax-free income allowed under that code (i.e., 1257 × 10 = £12,570).


3. Most Common UK Tax Codes and What They Mean

Below are some common UK tax codes and what they indicate:

Tax CodeWhat It Means
1257LStandard personal allowance (most people have this)
BRBasic Rate – all income is taxed at 20%, no personal allowance
D0Higher Rate – all income taxed at 40%
D1Additional Rate – all income taxed at 45%
KIndicates you have income not taxed another way and it’s more than your allowance
NTNo tax deducted
0TNo personal allowance; used when HMRC has not provided a code

These tax codes may be followed by W1, M1, or X, which indicates they’re used on a week 1 or month 1 basis—commonly known as an emergency tax code.


4. How to Check Your Tax Code

It’s vital to check that your UK tax code is correct, especially when starting a new job or receiving a new pension.

Here’s how to check your UK tax code:

  1. Look at Your Payslip:
    Your tax code is usually printed near your National Insurance number or gross pay.
  2. Use the HMRC Online Personal Tax Account:
    Visit https://www.gov.uk/personal-tax-account to check your tax code and see how it was calculated.
  3. Contact HMRC Directly:
    Call 0300 200 3300 for Income Tax queries if something seems wrong.
  4. Ask Your Employer or Pension Provider:
    They’ll be using the tax code HMRC sent them.

Checking your UK tax code should be part of your financial routine—just like reviewing your bank statement.


5. Why Your Tax Code Might Be Wrong

There are several reasons your UK tax code might be incorrect:

  • You’ve started or left a job mid-year
  • You have more than one income source (second job, pension)
  • You received benefits from your employer (e.g., a company car)
  • You claimed tax reliefs or allowances
  • HMRC made a mistake or is using outdated information

Incorrect tax codes can lead to underpaying or overpaying tax, which often requires correction at the end of the tax year or sooner if you notify HMRC.


6. Correcting a Tax Code Error

If you suspect your UK tax code is wrong:

  1. Log in to your personal tax account to check what HMRC knows about your income: https://www.gov.uk/personal-tax-account
  2. Use the “Check your Income Tax for the current year” tool to view your tax code: https://www.gov.uk/check-income-tax-current-year
  3. Report any discrepancies using the online service or by contacting HMRC.
  4. Provide correct and up-to-date information, such as new jobs, benefits, or changes in pension income.

HMRC will issue a new code to your employer or pension provider if needed.


7. Tax Codes for Multiple Jobs and Pensions

If you have more than one job or a pension, HMRC usually applies your tax-free allowance to your main income source. Your other jobs or pensions may have tax codes such as:

  • BR – all income taxed at 20%
  • 0T – no personal allowance applied

Be sure to notify HMRC which income source should be considered your main job to avoid losing your personal allowance unnecessarily.


8. Emergency Tax Codes

Emergency tax codes are used when HMRC doesn’t have enough information to assign the correct code. These codes often look like:

  • 1257L W1
  • 1257L M1
  • 1257L X

These temporary codes tax your income as if it’s the first week or month of the year, which can lead to incorrect deductions.

How to Fix It:

If you’re on an emergency tax code, provide a P45 from your previous employer, or fill out a Starter Checklist (formerly P46). Your tax code should be corrected within a few weeks.


9. BR, D0, and D1 Tax Codes Explained

These codes are usually applied when you have a second job or pension:

  • BR (Basic Rate) – taxed at 20%
  • D0 (Higher Rate) – taxed at 40%
  • D1 (Additional Rate) – taxed at 45%

If your secondary income shouldn’t be taxed at these rates, contact HMRC. Misapplication of these codes can result in significant overpayments.


10. Where to Get Help

If you’re confused about your UK tax code, don’t panic. There are several resources you can turn to:


11. Final Thoughts

Understanding your UK tax code isn’t just for accountants or HR departments—it’s for anyone earning a salary or pension. Whether you’re on the standard 1257L code or something more unusual like BR or K, your tax code directly impacts how much money ends up in your pocket.

Incorrect tax codes are more common than you think, especially if you’ve recently changed jobs or started receiving a new source of income. Don’t wait until the end of the tax year to check. Reviewing your code now could save you hundreds—or even thousands—of pounds.

So take a few minutes, check your payslip, and log in to your HMRC personal account. Understanding your UK tax code is a smart financial move that puts you in control of your earnings.

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