UK PAYE Tax Codes Complete: 2026/27

UK PAYE Tax Codes Complete 2026/27 Guide

Q: What is a UK tax code?

Tax code : 4-5 character identifier HMRC issues to employer / pension provider telling them how much Personal Allowance to apply when calculating PAYE tax deductions. Statutory basis: Income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682) + ITEPA 2003 Section 684. Format : Numeric portion : usually 1257 (representing £12,570 PA) but varies based on adjustments. Divide by 10 to get implied PA. Letter suffix : classifies your situation (L, M, N, etc.). Letter prefix (optional) : S (Scottish), C (Welsh), K (negative allowance). Special suffixes : W1, M1, X (emergency / non-cumulative). How HMRC sets codes : based on YOUR personal circumstances - employment status, second jobs, BIK, Marriage Allowance, untaxed income, prior under/over-payment, pension, expenses claimed. Code changes during year : HMRC issues new code (P2 Notice) when circumstances change. Triggers: starting new job, BIK change, marriage, MA election, becoming higher-rate. P2 Coding Notice : letter HMRC sends explaining how code calculated. Shows PA, deductions, allowances, total = code. Where to find your code : (1) Payslip - on every payslip. (2) P60 - annual end-of-year. (3) P45 - leaving employer. (4) HMRC P2 Notice - issued when code changes. (5) Personal Tax Account - current code visible. (6) HMRC App - mobile access. Why codes matter : wrong code = wrong tax deducted = lump sum bill (or refund) at year-end. Check codes carefully especially after job changes or major life events.

Q: What does code 1257L mean?

1257L : standard UK tax code for 2026/27. Indicates: full Personal Allowance £12,570 applied to this employment income. Most common tax code - ~75% of UK PAYE workers have 1257L. Decoding "1257" : implied PA = 1257 × 10 = £12,570. "L" suffix : standard allowance (no marriage / disability / special circumstances). Conditions for 1257L : (1) One job (or this is primary job with PA allocated here). (2) No benefits-in-kind (no company car, BUPA, etc.). (3) Not Marriage Allowance participant . (4) No untaxed income (no rental income, savings interest above PSA, etc., reported to HMRC). (5) No prior tax underpayment . (6) UK tax resident (not Scottish or Welsh-only). 1257L W1 / M1 / X : emergency variant. Calculated non-cumulatively. Common after job changes when P45 not yet provided. What 1257L means in practice : first £12,570 of income tax-free (per the PA). 20% on £12,571-£50,270. 40% on £50,271-£125,140. 45% above £125,140. Worked example - £30,000 salary on 1257L : PA = £12,570 (tax-free). Taxable = £17,430. IT = £17,430 × 20% = £3,486. Annual NI = £1,394. Net = £25,120/year ≈ £2,093/month. If wrong : check Personal Tax Account. Common errors: 1257L applied to both jobs (PA double-counted), BIK not on code, MA not applied. Contact HMRC 0300 200 3300 to correct. Code 1257L vs L1257 : order matters - "1257L" correct UK format. "L1257" would be parsed differently.

Q: What is the BR tax code?

BR tax code : "Basic Rate" - all income taxed at 20% with NO Personal Allowance applied. Statutory basis: SI 2003/2682 Regulation 24 (multiple-employment codes). Used for : most commonly applied to SECOND job where PA has been allocated to your primary job. Or where employer has no other tax code info (P45 missing). Mechanics : every £1 earned via BR-coded job taxed at 20%. No tax-free zone. Higher rate doesn't apply (separate D0 / D1 codes for those). Worked example - £30k primary job (1257L) + £8k second job (BR) : Primary job : £12,570 PA + £17,430 at 20% = £3,486 tax. Second job (BR) : £8,000 × 20% = £1,600 tax. Total = £5,086. If wrong code used on second job : applying 1257L to BOTH jobs = £4,260 tax + missing £1,600 = £2,800 underpayment at year-end. HMRC reconciles via P800 + adjusts next year's code. BR vs D0 vs D1 : BR : 20% on all = basic-rate workers. D0 : 40% on all = higher-rate workers with primary salary in higher band. D1 : 45% on all = additional-rate workers (rare for second jobs - means primary above £125,140). BR + Scotland : SBR (Scottish BR) = 20% Scottish basic-rate. Slightly different to UK BR for high earners due to Scottish band structure. Self-correction : if HMRC has incorrectly used BR (you should have full PA), contact HMRC to switch. Refunds possible for over-deducted tax.

Q: What is the K tax code + how does it work?

K codes : NEGATIVE Personal Allowance - means you owe HMRC tax + they're recovering it via payroll. Statutory basis: SI 2003/2682 Regulation 22 (negative codes). Format : "K500" means -£5,000 PA equivalent (NEGATIVE). Decode: K_number × 10 = additional taxable amount. Why K code happens : (1) Underpaid tax from prior year : HMRC recovering via current code adjustment. (2) Large BIK : company car / BUPA / accommodation BIK exceeds PA. PA fully consumed + remainder taxed. (3) State Pension exceeds PA : pensioner with State Pension £12,548 + workplace pension - State Pension uses most PA, leaving K code on workplace pension. (4) Multiple income sources : combined income exceeds PA significantly, with majority of PA used in one source. (5) Tax owed via SA : HMRC collects SA underpayment via tax code if under £3,000. Worked example - K500 on £30k salary : K500 = +£5,000 taxable added to gross. Total taxable = £30,000 + £5,000 = £35,000. Tax = £35,000 × 20% = £7,000 (or £3,486 + extra recovery). Effective marginal rate higher. K code limit : cannot deduct more than 50% of gross pay (SI 2003/2682 Regulation 84). If K code would exceed this, capped at 50%. Underpayment carried forward. Spotting K codes early : P2 Coding Notice received explains why. Check Personal Tax Account → tax code adjustments section. Avoiding K codes : pay SA underpayment directly (don't take "via tax code" option), declare BIK before P11D processing, request lump-sum tax repayment instead of code-recovery if available. If wrong : K codes often retain after underlying issue resolved. Verify P2 Notice + contact HMRC to remove if no longer applicable.

Q: What are W1 / M1 / X (emergency) tax codes?

W1 / M1 / X : "Week 1 / Month 1 / X" emergency codes. NON-CUMULATIVE calculation. Statutory basis: SI 2003/2682 Regulation 23. Difference from standard cumulative codes : Cumulative (standard 1257L): tax calculated using YTD income + YTD tax already paid. Adjusts dynamically across year. Non-cumulative (W1/M1/X) : each pay period treated independently. Just the weekly / monthly PA allocation applied. No YTD adjustment. When emergency codes used : (1) Starting new job without P45 : HMRC doesn't know your YTD position. Uses emergency code until P45 details arrive. (2) After period of unemployment : complex YTD picture - emergency code used. (3) Starting pension / drawdown : HMRC needs time to coordinate with pension provider. (4) Self-employed becoming employed mid-year : prior YTD info missing. Effect on tax : emergency code typically OVER-DEDUCTS tax for new starters. P45 / P800 reconciliation at year-end usually generates refund. Worked example : started new £40k job July 2026 (4 months into tax year). Should have YTD PA of £4,190 (£12,570 ÷ 12 × 4). Cumulative code 1257L would treat it as such. W1 emergency code treats each weekly payment as Week 1 of new year. PA of £241/week (£12,570 ÷ 52) applied. Over the remaining 8 months → £8,400 PA used vs cumulative £8,380 - similar result eventually. Issue with W1/M1 : cash flow + visibility. Each pay packet has higher tax until P800 reconciliation arrives 6+ months later. Resolving : provide P45 to new employer ASAP. HMRC switches to cumulative within 1-2 pay cycles. P800 timing : tax reconciliation typically Aug-Oct following tax year end. Refund of any over-deduction sent automatically.

Q: What is the M tax code (Marriage Allowance recipient)?

M tax code : indicates you've RECEIVED Marriage Allowance from spouse. PA increased by £1,260. Statutory basis: Section 55C ITA 2007 + SI 2003/2682. Format : 1383M = £12,570 PA + £1,260 transferred MA = £13,830 total. Conditions : (1) Married / civil partnership : cohabiting doesn't qualify. (2) Recipient is basic-rate taxpayer : must NOT be higher-rate. (3) Transferor's income : must be below £12,570 (Personal Allowance). (4) Both born after 6 April 1935 : pre-1935 = different scheme (Married Couple's Allowance). Saving : £252/year (20% × £1,260). Plus 4-year backdating possible. Worked example - £30k salary on 1383M : £13,830 PA + £16,170 at 20% = £3,234 tax. Saves £252 vs same salary on standard 1257L (£3,486 tax). Loss triggers : (a) Crossing higher-rate threshold : M code removed, clawback applied. (b) Transferor income exceeds £13,830 : net loss situation. (c) Divorce / separation : M code removed from year of separation. (d) Death of spouse : M continues year of death, removed following. HMRC application : lower-earning spouse applies via gov.uk/apply-marriage-allowance OR Personal Tax Account. Recipient automatically gets M code allocated to highest-earning employment. Cancellation : can cancel via Personal Tax Account. HMRC removes M from code following month. Backdated MA + tax code : backdated years processed via lump-sum refund (cheque or BACS), not via current year code adjustment.

Q: What is the N tax code (Marriage Allowance transferor)?

N tax code : indicates you've TRANSFERRED Marriage Allowance to spouse. PA reduced by £1,260. Statutory basis: Section 55C ITA 2007. Format : 1131N = £12,570 PA - £1,260 transferred = £11,310 effective PA. Conditions : (1) Married / civil partnership . (2) Your income : below £12,570 (PA). (3) Spouse is recipient : basic-rate taxpayer. Worked example - £8,000 part-time salary on 1131N : £11,310 PA applied. Income £8,000 below reduced PA - so STILL £0 income tax. NO direct cost to transferor. Net: transferor unaffected (income was below PA anyway), recipient saves £252. If transferor income exceeds £11,310 BUT below £12,570 : negative scenario . Income £12,000 on 1131N pays tax on (£12,000 - £11,310) × 20% = £138. Without MA election, would pay £0 tax. Net family position: -£138 (transferor pays) + £252 (recipient saves) = £114 family benefit. Still positive but reduced. If transferor income exceeds £12,570 : financially worse than no MA election. Cancel. If transferor income exceeds £13,830 : definitely worse. Cancel immediately. Apply for MA : lower-earning spouse (transferor) applies via gov.uk. Wrong order = HMRC rejects. Cancellation : either spouse can cancel via Personal Tax Account. HMRC removes N from transferor's code + M from recipient's code in following tax year. 4-year backdating : applies to past years where you were eligible but didn't apply. Up to £1,260 in lump-sum refund possible.

Q: What is the S tax code (Scottish taxpayer)?

S tax code prefix : identifies Scottish taxpayer. Different income tax bands + rates apply. Statutory basis: Section 80F Scotland Act 1998 + ITA 2007 Section 11A. Scotland Act 2016 : Scottish Parliament has full control over earned-income tax rates + thresholds since April 2017. Scottish bands 2026/27 : Starter rate 19% up to £14,876; Basic 20% up to £26,562; Intermediate 21% up to £43,662; Higher 42% up to £75,000; Advanced 45% up to £125,140; Top 48% above £125,140. Compared to rUK (England/Wales/NI) : 20% basic / 40% higher / 45% additional. Scottish has SIX bands vs rUK three. S code format : S1257L = Scottish version of 1257L. SBR = Scottish Basic Rate. SD0 = Scottish Intermediate Rate (21%). SD1 = Scottish Higher Rate (42%). SD2 = Scottish Advanced Rate (45%). SD3 = Scottish Top Rate (48%). Determining Scottish taxpayer : HMRC tests : (1) UK resident ; (2) Main home in Scotland for the year . NOT determined by employment location - your HOME address determines. Cross-border workers : living in England + working in Scotland (or vice versa) = home address determines tax code. Updating residence : tell HMRC via Personal Tax Account when moving to/from Scotland. Code changes from next tax year typically. NI is NOT devolved : same UK NI rates apply to Scottish workers. Worked example - £40k salary on S1257L : Scottish IT: £12,570 PA + £2,306 at 19% (starter) + £11,686 at 20% (basic) + £13,438 at 21% (intermediate) = £5,503. Compared to rUK 1257L: £12,570 PA + £27,430 at 20% = £5,486. Difference £17 = small extra tax in Scotland at this income level. Higher income worker : £80k salary on S1257L pays ~£3,500 MORE than rUK 1257L due to Scottish intermediate + higher rates.

Q: What is the C tax code (Welsh taxpayer)?

C tax code prefix : Welsh taxpayer. Statutory basis: Wales Act 2014 Sections 8-14 + Wales Act 2017. Welsh Rates of Income Tax (WRIT) operational since April 2019. Current Welsh rates 2026/27 : SAME as rUK. 20% basic / 40% higher / 45% additional. How WRIT works : UK Parliament reduces UK rates by 10p for Welsh taxpayers. Welsh Parliament adds its own 10p (currently). Net result: identical to rUK rates. Future divergence possible : Welsh Parliament COULD set higher or lower rates. Currently chosen to match rUK. Political consideration vs revenue. C code format : C1257L = Welsh version of 1257L. CBR = Welsh BR. CD0 / CD1 = Welsh higher / additional rate codes. Determining Welsh taxpayer : home address in Wales. Saving employees from tax error : Welsh code vs English code distinction matters even if rates currently match - future-proofs against divergence. National Insurance NOT devolved : same UK NI rates for Welsh taxpayers. Worked example - £40k salary on C1257L : same as rUK. £12,570 PA + £27,430 at 20% = £5,486 tax. Updating residence : tell HMRC via Personal Tax Account when moving to/from Wales. C vs S : C (Welsh) currently identical to rUK rates. S (Scottish) substantially different. Misallocation between C and S codes affects only Scottish residents - vital they have correct S code. Future Welsh divergence speculation : 2024 Welsh Government consulted on potentially raising higher-rate Welsh tax by 1pp. Decision deferred to 2026/27 budget review. If implemented, C code becomes operationally distinct from rUK 1257L. Cross-border Welsh workers : living Wales + working England (or vice versa) = home address determines C code allocation.

Q: What is the 0T tax code?

0T tax code : NO Personal Allowance applied. Marginal rates from £1 of income. Statutory basis: SI 2003/2682 Regulation 23. Important - different from BR : BR : 20% on all (assumes basic-rate). 0T : marginal rates apply - 20% up to band, then 40% in higher band, 45% in additional. NO PA. When 0T used : (1) Default code when HMRC has no info : starting new job without P45 + before HMRC reconciles. (2) Income above £125,140 : PA fully tapered to zero. (3) Higher-rate / additional-rate second jobs with no PA share . (4) Self-employed with significant SA income now also receiving PAYE : HMRC may use 0T initially. (5) Specific HMRC adjustments for prior underpayment : similar to K code mechanic. 0T variants : 0T W1 / M1 / X : emergency basis 0T. S0T : Scottish 0T. C0T : Welsh 0T. Worked example - £40k salary on 0T : NO PA. Taxable = £40,000. Tax = £37,700 × 20% + £2,300 × 40% = £7,540 + £920 = £8,460. Compared to 1257L: £5,486. Over-deducted £2,974. Resolution if wrong : provide P45 from previous employer + Starter Checklist via Personal Tax Account. HMRC switches to correct code within 1-2 pay cycles. 0T vs BR for second jobs : BR assumes you're basic-rate elsewhere. 0T treats as full marginal-rate calculation. BR more common for true second jobs. 0T more common for default / unknown scenarios.

Every UK PAYE tax code explained for 2026/27. 14-code reference table covering standard (1257L), basic / higher / additional rates (BR / D0 / D1), no allowance (0T / NT), negative K codes for recovery, emergency W1/M1/X non-cumulative, Marriage Allowance M / N codes, regional prefixes S (Scottish) + C (Welsh). P2 Coding Notice interpretation. 5-step error correction process. Code allocation between multiple jobs. Statute - Income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682), ITEPA 2003 Section 684, ITA 2007 Section 55C (MA), Scotland Act 2016, Wales Act 2014. 12-FAQ deep-dive.

2026/27 all UK tax codes

Code	Meaning	Who gets it
1257L	Standard Personal Allowance £12,570	Most workers - one job, no benefits, no MA, no underpaid tax
BR	Basic Rate - all income at 20%	Second job / pension where PA used elsewhere
D0	Higher Rate - all income at 40%	Second income source for higher-rate taxpayer
D1	Additional Rate - all income at 45%	Second income source for additional-rate taxpayer
0T	No Personal Allowance - taxed at marginal rates from £1	Default code when no info available + earnings >£100k full taper
NT	No Tax	Non-resident with no UK tax liability, or specific exempt scenarios
K500 (any K prefix)	Negative tax code - owed tax being recovered	Workers with BIK / underpaid tax / multiple income reducing PA below zero
1257L W1	1257L on Week 1 emergency basis	First job after gap; emergency code until P45 received
1257L M1	1257L on Month 1 emergency basis	Same as W1 but monthly paid
1257L X	1257L on emergency basis (W1 or M1 unspecified)	Generic emergency code
1131N	Marriage Allowance transferor (£1,260 transferred)	Lower-earning spouse transferring MA
1383M	Marriage Allowance recipient (£1,260 added to PA)	Higher-earning spouse receiving MA
S1257L	Scottish 1257L - Scottish income tax rates apply	Scottish taxpayer (Scottish address)
C1257L	Welsh 1257L - currently same rates as England	Welsh taxpayer (Welsh address)

Frequently asked questions

What is a UK tax code?

Tax code: 4-5 character identifier HMRC issues to employer / pension provider telling them how much Personal Allowance to apply when calculating PAYE tax deductions. Statutory basis: Income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682) + ITEPA 2003 Section 684. Format: Numeric portion: usually 1257 (representing £12,570 PA) but varies based on adjustments. Divide by 10 to get implied PA. Letter suffix: classifies your situation (L, M, N, etc.). Letter prefix (optional): S (Scottish), C (Welsh), K (negative allowance). Special suffixes: W1, M1, X (emergency / non-cumulative). How HMRC sets codes: based on YOUR personal circumstances - employment status, second jobs, BIK, Marriage Allowance, untaxed income, prior under/over-payment, pension, expenses claimed. Code changes during year: HMRC issues new code (P2 Notice) when circumstances change. Triggers: starting new job, BIK change, marriage, MA election, becoming higher-rate. P2 Coding Notice: letter HMRC sends explaining how code calculated. Shows PA, deductions, allowances, total = code. Where to find your code: (1) Payslip - on every payslip. (2) P60 - annual end-of-year. (3) P45 - leaving employer. (4) HMRC P2 Notice - issued when code changes. (5) Personal Tax Account - current code visible. (6) HMRC App - mobile access. Why codes matter: wrong code = wrong tax deducted = lump sum bill (or refund) at year-end. Check codes carefully especially after job changes or major life events.

What does code 1257L mean?

1257L: standard UK tax code for 2026/27. Indicates: full Personal Allowance £12,570 applied to this employment income. Most common tax code - ~75% of UK PAYE workers have 1257L. Decoding "1257": implied PA = 1257 × 10 = £12,570. "L" suffix: standard allowance (no marriage / disability / special circumstances). Conditions for 1257L: (1) One job (or this is primary job with PA allocated here). (2) No benefits-in-kind (no company car, BUPA, etc.). (3) Not Marriage Allowance participant. (4) No untaxed income (no rental income, savings interest above PSA, etc., reported to HMRC). (5) No prior tax underpayment. (6) UK tax resident (not Scottish or Welsh-only). 1257L W1 / M1 / X: emergency variant. Calculated non-cumulatively. Common after job changes when P45 not yet provided. What 1257L means in practice: first £12,570 of income tax-free (per the PA). 20% on £12,571-£50,270. 40% on £50,271-£125,140. 45% above £125,140. Worked example - £30,000 salary on 1257L: PA = £12,570 (tax-free). Taxable = £17,430. IT = £17,430 × 20% = £3,486. Annual NI = £1,394. Net = £25,120/year ≈ £2,093/month. If wrong: check Personal Tax Account. Common errors: 1257L applied to both jobs (PA double-counted), BIK not on code, MA not applied. Contact HMRC 0300 200 3300 to correct. Code 1257L vs L1257: order matters - "1257L" correct UK format. "L1257" would be parsed differently.

What is the BR tax code?

BR tax code: "Basic Rate" - all income taxed at 20% with NO Personal Allowance applied. Statutory basis: SI 2003/2682 Regulation 24 (multiple-employment codes). Used for: most commonly applied to SECOND job where PA has been allocated to your primary job. Or where employer has no other tax code info (P45 missing). Mechanics: every £1 earned via BR-coded job taxed at 20%. No tax-free zone. Higher rate doesn't apply (separate D0 / D1 codes for those). Worked example - £30k primary job (1257L) + £8k second job (BR): Primary job: £12,570 PA + £17,430 at 20% = £3,486 tax. Second job (BR): £8,000 × 20% = £1,600 tax. Total = £5,086. If wrong code used on second job: applying 1257L to BOTH jobs = £4,260 tax + missing £1,600 = £2,800 underpayment at year-end. HMRC reconciles via P800 + adjusts next year's code. BR vs D0 vs D1: BR: 20% on all = basic-rate workers. D0: 40% on all = higher-rate workers with primary salary in higher band. D1: 45% on all = additional-rate workers (rare for second jobs - means primary above £125,140). BR + Scotland: SBR (Scottish BR) = 20% Scottish basic-rate. Slightly different to UK BR for high earners due to Scottish band structure. Self-correction: if HMRC has incorrectly used BR (you should have full PA), contact HMRC to switch. Refunds possible for over-deducted tax.

What is the K tax code + how does it work?

K codes: NEGATIVE Personal Allowance - means you owe HMRC tax + they're recovering it via payroll. Statutory basis: SI 2003/2682 Regulation 22 (negative codes). Format: "K500" means -£5,000 PA equivalent (NEGATIVE). Decode: K_number × 10 = additional taxable amount. Why K code happens: (1) Underpaid tax from prior year: HMRC recovering via current code adjustment. (2) Large BIK: company car / BUPA / accommodation BIK exceeds PA. PA fully consumed + remainder taxed. (3) State Pension exceeds PA: pensioner with State Pension £12,548 + workplace pension - State Pension uses most PA, leaving K code on workplace pension. (4) Multiple income sources: combined income exceeds PA significantly, with majority of PA used in one source. (5) Tax owed via SA: HMRC collects SA underpayment via tax code if under £3,000. Worked example - K500 on £30k salary: K500 = +£5,000 taxable added to gross. Total taxable = £30,000 + £5,000 = £35,000. Tax = £35,000 × 20% = £7,000 (or £3,486 + extra recovery). Effective marginal rate higher. K code limit: cannot deduct more than 50% of gross pay (SI 2003/2682 Regulation 84). If K code would exceed this, capped at 50%. Underpayment carried forward. Spotting K codes early: P2 Coding Notice received explains why. Check Personal Tax Account → tax code adjustments section. Avoiding K codes: pay SA underpayment directly (don't take "via tax code" option), declare BIK before P11D processing, request lump-sum tax repayment instead of code-recovery if available. If wrong: K codes often retain after underlying issue resolved. Verify P2 Notice + contact HMRC to remove if no longer applicable.

What are W1 / M1 / X (emergency) tax codes?

W1 / M1 / X: "Week 1 / Month 1 / X" emergency codes. NON-CUMULATIVE calculation. Statutory basis: SI 2003/2682 Regulation 23. Difference from standard cumulative codes: Cumulative (standard 1257L): tax calculated using YTD income + YTD tax already paid. Adjusts dynamically across year. Non-cumulative (W1/M1/X): each pay period treated independently. Just the weekly / monthly PA allocation applied. No YTD adjustment. When emergency codes used: (1) Starting new job without P45: HMRC doesn't know your YTD position. Uses emergency code until P45 details arrive. (2) After period of unemployment: complex YTD picture - emergency code used. (3) Starting pension / drawdown: HMRC needs time to coordinate with pension provider. (4) Self-employed becoming employed mid-year: prior YTD info missing. Effect on tax: emergency code typically OVER-DEDUCTS tax for new starters. P45 / P800 reconciliation at year-end usually generates refund. Worked example: started new £40k job July 2026 (4 months into tax year). Should have YTD PA of £4,190 (£12,570 ÷ 12 × 4). Cumulative code 1257L would treat it as such. W1 emergency code treats each weekly payment as Week 1 of new year. PA of £241/week (£12,570 ÷ 52) applied. Over the remaining 8 months → £8,400 PA used vs cumulative £8,380 - similar result eventually. Issue with W1/M1: cash flow + visibility. Each pay packet has higher tax until P800 reconciliation arrives 6+ months later. Resolving: provide P45 to new employer ASAP. HMRC switches to cumulative within 1-2 pay cycles. P800 timing: tax reconciliation typically Aug-Oct following tax year end. Refund of any over-deduction sent automatically.

What is the M tax code (Marriage Allowance recipient)?

M tax code: indicates you've RECEIVED Marriage Allowance from spouse. PA increased by £1,260. Statutory basis: Section 55C ITA 2007 + SI 2003/2682. Format: 1383M = £12,570 PA + £1,260 transferred MA = £13,830 total. Conditions: (1) Married / civil partnership: cohabiting doesn't qualify. (2) Recipient is basic-rate taxpayer: must NOT be higher-rate. (3) Transferor's income: must be below £12,570 (Personal Allowance). (4) Both born after 6 April 1935: pre-1935 = different scheme (Married Couple's Allowance). Saving: £252/year (20% × £1,260). Plus 4-year backdating possible. Worked example - £30k salary on 1383M: £13,830 PA + £16,170 at 20% = £3,234 tax. Saves £252 vs same salary on standard 1257L (£3,486 tax). Loss triggers: (a) Crossing higher-rate threshold: M code removed, clawback applied. (b) Transferor income exceeds £13,830: net loss situation. (c) Divorce / separation: M code removed from year of separation. (d) Death of spouse: M continues year of death, removed following. HMRC application: lower-earning spouse applies via gov.uk/apply-marriage-allowance OR Personal Tax Account. Recipient automatically gets M code allocated to highest-earning employment. Cancellation: can cancel via Personal Tax Account. HMRC removes M from code following month. Backdated MA + tax code: backdated years processed via lump-sum refund (cheque or BACS), not via current year code adjustment.

What is the N tax code (Marriage Allowance transferor)?

N tax code: indicates you've TRANSFERRED Marriage Allowance to spouse. PA reduced by £1,260. Statutory basis: Section 55C ITA 2007. Format: 1131N = £12,570 PA - £1,260 transferred = £11,310 effective PA. Conditions: (1) Married / civil partnership. (2) Your income: below £12,570 (PA). (3) Spouse is recipient: basic-rate taxpayer. Worked example - £8,000 part-time salary on 1131N: £11,310 PA applied. Income £8,000 below reduced PA - so STILL £0 income tax. NO direct cost to transferor. Net: transferor unaffected (income was below PA anyway), recipient saves £252. If transferor income exceeds £11,310 BUT below £12,570: negative scenario. Income £12,000 on 1131N pays tax on (£12,000 - £11,310) × 20% = £138. Without MA election, would pay £0 tax. Net family position: -£138 (transferor pays) + £252 (recipient saves) = £114 family benefit. Still positive but reduced. If transferor income exceeds £12,570: financially worse than no MA election. Cancel. If transferor income exceeds £13,830: definitely worse. Cancel immediately. Apply for MA: lower-earning spouse (transferor) applies via gov.uk. Wrong order = HMRC rejects. Cancellation: either spouse can cancel via Personal Tax Account. HMRC removes N from transferor's code + M from recipient's code in following tax year. 4-year backdating: applies to past years where you were eligible but didn't apply. Up to £1,260 in lump-sum refund possible.

What is the S tax code (Scottish taxpayer)?

S tax code prefix: identifies Scottish taxpayer. Different income tax bands + rates apply. Statutory basis: Section 80F Scotland Act 1998 + ITA 2007 Section 11A. Scotland Act 2016: Scottish Parliament has full control over earned-income tax rates + thresholds since April 2017. Scottish bands 2026/27: Starter rate 19% up to £14,876; Basic 20% up to £26,562; Intermediate 21% up to £43,662; Higher 42% up to £75,000; Advanced 45% up to £125,140; Top 48% above £125,140. Compared to rUK (England/Wales/NI): 20% basic / 40% higher / 45% additional. Scottish has SIX bands vs rUK three. S code format: S1257L = Scottish version of 1257L. SBR = Scottish Basic Rate. SD0 = Scottish Intermediate Rate (21%). SD1 = Scottish Higher Rate (42%). SD2 = Scottish Advanced Rate (45%). SD3 = Scottish Top Rate (48%). Determining Scottish taxpayer: HMRC tests: (1) UK resident; (2) Main home in Scotland for the year. NOT determined by employment location - your HOME address determines. Cross-border workers: living in England + working in Scotland (or vice versa) = home address determines tax code. Updating residence: tell HMRC via Personal Tax Account when moving to/from Scotland. Code changes from next tax year typically. NI is NOT devolved: same UK NI rates apply to Scottish workers. Worked example - £40k salary on S1257L: Scottish IT: £12,570 PA + £2,306 at 19% (starter) + £11,686 at 20% (basic) + £13,438 at 21% (intermediate) = £5,503. Compared to rUK 1257L: £12,570 PA + £27,430 at 20% = £5,486. Difference £17 = small extra tax in Scotland at this income level. Higher income worker: £80k salary on S1257L pays ~£3,500 MORE than rUK 1257L due to Scottish intermediate + higher rates.

What is the C tax code (Welsh taxpayer)?

C tax code prefix: Welsh taxpayer. Statutory basis: Wales Act 2014 Sections 8-14 + Wales Act 2017. Welsh Rates of Income Tax (WRIT) operational since April 2019. Current Welsh rates 2026/27: SAME as rUK. 20% basic / 40% higher / 45% additional. How WRIT works: UK Parliament reduces UK rates by 10p for Welsh taxpayers. Welsh Parliament adds its own 10p (currently). Net result: identical to rUK rates. Future divergence possible: Welsh Parliament COULD set higher or lower rates. Currently chosen to match rUK. Political consideration vs revenue. C code format: C1257L = Welsh version of 1257L. CBR = Welsh BR. CD0 / CD1 = Welsh higher / additional rate codes. Determining Welsh taxpayer: home address in Wales. Saving employees from tax error: Welsh code vs English code distinction matters even if rates currently match - future-proofs against divergence. National Insurance NOT devolved: same UK NI rates for Welsh taxpayers. Worked example - £40k salary on C1257L: same as rUK. £12,570 PA + £27,430 at 20% = £5,486 tax. Updating residence: tell HMRC via Personal Tax Account when moving to/from Wales. C vs S: C (Welsh) currently identical to rUK rates. S (Scottish) substantially different. Misallocation between C and S codes affects only Scottish residents - vital they have correct S code. Future Welsh divergence speculation: 2024 Welsh Government consulted on potentially raising higher-rate Welsh tax by 1pp. Decision deferred to 2026/27 budget review. If implemented, C code becomes operationally distinct from rUK 1257L. Cross-border Welsh workers: living Wales + working England (or vice versa) = home address determines C code allocation.

What is the 0T tax code?

0T tax code: NO Personal Allowance applied. Marginal rates from £1 of income. Statutory basis: SI 2003/2682 Regulation 23. Important - different from BR: BR: 20% on all (assumes basic-rate). 0T: marginal rates apply - 20% up to band, then 40% in higher band, 45% in additional. NO PA. When 0T used: (1) Default code when HMRC has no info: starting new job without P45 + before HMRC reconciles. (2) Income above £125,140: PA fully tapered to zero. (3) Higher-rate / additional-rate second jobs with no PA share. (4) Self-employed with significant SA income now also receiving PAYE: HMRC may use 0T initially. (5) Specific HMRC adjustments for prior underpayment: similar to K code mechanic. 0T variants: 0T W1 / M1 / X: emergency basis 0T. S0T: Scottish 0T. C0T: Welsh 0T. Worked example - £40k salary on 0T: NO PA. Taxable = £40,000. Tax = £37,700 × 20% + £2,300 × 40% = £7,540 + £920 = £8,460. Compared to 1257L: £5,486. Over-deducted £2,974. Resolution if wrong: provide P45 from previous employer + Starter Checklist via Personal Tax Account. HMRC switches to correct code within 1-2 pay cycles. 0T vs BR for second jobs: BR assumes you're basic-rate elsewhere. 0T treats as full marginal-rate calculation. BR more common for true second jobs. 0T more common for default / unknown scenarios.

What is the NT tax code?

NT tax code: "No Tax". No PAYE deductions applied. Statutory basis: SI 2003/2682 Regulation 23(6). When NT used: (1) Non-UK tax resident: no UK tax liability under treaty + non-residence. (2) Diplomatic / consular staff: specific exemptions under Vienna Conventions + UK tax treaties. (3) Crown servants overseas: certain Crown employment overseas. (4) Foreign government employees in UK: certain bilateral arrangements. (5) HMRC error or specific adjustment: rare. NT vs no tax code at all: NT means HMRC has actively decided no PAYE should apply. No code at all = administrative error. For genuine non-residents: NT prevents over-deduction. Self Assessment may still be required for UK-source income. For non-residents with UK source income: NT doesn't always apply - depends on income type + treaty. UK-source rental, dividends, capital gains may still attract UK tax even if employer pays via NT code. Returning to UK residence: NT code becomes inappropriate. Update HMRC of residence change to switch to standard code. Worked example - non-resident contractor paid by UK company: NT code applied = no UK PAYE deducted. Income reported via SA. UK-source income may be taxable under double tax treaty rules. Misuse warnings: NT is NOT a "tax-free zone" choice. HMRC issues based on specific eligibility. Falsely claiming non-residence to get NT = tax evasion. Identity verification: HMRC verifies non-residence claims via passport stamps, travel records, employer attestations. Schedule 36 FA 2008 information notices may be issued.

How do I correct a wrong tax code?

5-step tax code correction process: Step 1 - Verify it's wrong: check Personal Tax Account. Compare against your actual circumstances. Common errors don't equal wrong - genuine multiple-job scenarios, BIK, MA require specific codes. Step 2 - Identify the error: examples: (a) Both jobs have 1257L (PA double-counted) - report missing second-job adjustment. (b) BIK not on code - report new company car / BUPA / accommodation. (c) Old BIK still on code - employer-reported BIK ended but code unchanged. (d) MA not applied when eligible. (e) Wrong region prefix (S/C) after moving. Step 3 - Contact HMRC: Online via PTA (preferred): gov.uk/personal-tax-account → tax code section → request change. HMRC App: same functionality. Phone: 0300 200 3300 (Mon-Fri 8am-6pm). Wait times 30-90min typical. Webchat: limited availability. Step 4 - HMRC issues new code: typically within 1-2 pay periods. Send P2 Notice explaining change. Step 5 - Verify on payslip: confirm new code applied. If under-deducted in error months, HMRC adjusts via tax code (cumulative basis catches up). If you owe tax due to wrong code: option 1 - lump sum to HMRC; option 2 - HMRC collects via following year's code (up to £3,000). If overpaid due to wrong code: P800 calculation issued Aug-Oct following tax year. Refund automatic if you provided bank details. Pre-emptive code check: end of February / early March (review code for upcoming tax year). HMRC issues new codes for new tax year by early March - check before tax year starts to flag errors.

What is the P2 Coding Notice + how to interpret it?

P2 Coding Notice: written notification HMRC sends when issuing or changing your tax code. Statutory basis: SI 2003/2682 Regulation 13. Sent when: (1) Annual review: new code for new tax year (received Feb-March). (2) Mid-year change: BIK update, MA election, address change, prior underpayment recovery. (3) New employment: code allocated for new PAYE source. P2 contents: Section A - Personal allowances: PA, MA, blind person's allowance, marriage transferred (if applicable). Total tax-free amount. Section B - Adjustments REDUCING allowances: BIK (company car, BUPA, accommodation), untaxed interest (above PSA), property income, pension annual allowance excess, prior underpaid tax. Section C - Total tax-free amount: A minus B. Section D - Resulting code: tax-free amount × 10 (rounded down to last full £) → 4-digit number + letter suffix. Section E - How code applied: cumulative vs W1/M1 emergency basis. Section F - Allocation across multiple employments (if relevant): how PA split between jobs. Worked example P2 interpretation: Section A: PA £12,570. Section B: company car £6,500. Section C: £12,570 - £6,500 = £6,070 tax-free. Section D: £6,070 ÷ 10 → 607L tax code. Section E: cumulative. Action items from P2: (1) Verify ALL figures accurate: especially BIK + untaxed income. (2) Check resulting code applied to right employment. (3) Identify ongoing issues: persistent K code suggests broader tax position to review. (4) Spot prior-year carryover: underpaid tax recovery often surprises taxpayers. If P2 wrong: contact HMRC immediately. Don't wait for payroll deductions to compound the error. P2 records retained on Personal Tax Account.