UK Tax Code Explained (2026 Guide): What Your Tax Code Means & How to Fix It
Your UK tax code determines how much Income Tax your employer or pension provider deducts from your pay. If your tax code is wrong, you could overpay tax or receive an unexpected HMRC bill later. This guide explains UK tax codes clearly, using official HMRC rules, practical examples, and up-to-date guidance for the 2025 to 2026 tax year.
What Is a UK Tax Code?
A tax code is issued by HM Revenue & Customs (HMRC) and sent to your employer or pension provider. It tells them how much tax-free income you’re entitled to and how your income should be taxed.
Each job or pension you have usually comes with its own tax code.
How to Read a UK Tax Code
UK tax codes contain numbers and letters, each with a specific meaning:
- Numbers show your tax-free Personal Allowance
- Letters explain your tax situation
Example:
1257L means:
- You receive the standard Personal Allowance of £12,570
- You pay tax only on income above that amount
Common UK Tax Codes Explained
1257L – Standard Tax Code
This is the most common UK tax code. It applies to people with one job or pension and no special circumstances.
0T – No Personal Allowance
Used when:
- Your allowance is used elsewhere
- HMRC lacks your employment details
- You start a new job without a P45
All income is taxed at 20%, 40%, or 45%, depending on earnings.
BR – Basic Rate Tax Code
All income is taxed at 20%. Common for:
- Second jobs
- Additional pensions
D0 & D1 – Higher Tax Rates
- D0 → 40% tax on all income
- D1 → 45% tax on all income
Often used when your Personal Allowance is already allocated.
M & N – Marriage Allowance
- M: You receive your partner’s unused allowance
- N: You transfer part of your allowance to your partner
Only available to eligible couples.
NT – No Tax
No tax deducted. Rare, but may apply in cases such as:
- Bankruptcy
- Certain non-resident situations
S & C – Scottish and Welsh Tax Codes
- S: Scottish income tax rates apply
- C: Welsh income tax rates apply
The UK government still collects tax, but rates differ.
Special UK Tax Codes
T – Special Circumstances
Used when HMRC needs to calculate tax manually, often due to:
- Untaxed income
- Benefits in kind
K – Tax on Benefits
Used when taxable benefits exceed your Personal Allowance.
Your employer deducts extra tax directly from your salary.
Emergency Tax Codes (W1, M1, X)
Applied when HMRC lacks full income details.
These codes often result in overpaid tax, which is corrected later.
HMRC official guide:
https://www.gov.uk/tax-codes
HMRC Personal Tax Account:
https://www.gov.uk/personal-tax-account
Income tax rates UK:
https://www.gov.uk/income-tax-rates
How to Check Your UK Tax Code
You can find your tax code on:
- Your payslip
- P45 or P60
- Your HMRC Personal Tax Account
- The HMRC app
What to Do If Your Tax Code Is Wrong
If something looks incorrect:
- Log in to your HMRC Personal Tax Account
- Check income and employment details
- Contact HMRC directly if needed
HMRC will issue a corrected tax code if required.
Why UK Tax Codes Change
Your tax code may change if you:
- Start or leave a job
- Get a pay rise
- Receive company benefits
- Take a second job
- Move between England, Scotland, or Wales
HMRC usually notifies you, but it’s best to check regularly.
How to Avoid Overpaying or Underpaying Tax
- Review payslips monthly
- Update HMRC when circumstances change
- Use HMRC’s income tax checker
- Seek professional tax advice if unsure
Frequently Asked Questions (FAQ)
Can I have more than one tax code?
Yes. Each job or pension may have a different tax code.
Can I change my tax code myself?
No, but you can update your details with HMRC and request a review.
What happens if I pay too much tax?
HMRC will issue a refund, usually automatically.
How long do emergency tax codes last?
Until HMRC receives correct income details.
Final Thoughts
Understanding your UK tax code helps you avoid mistakes, refunds delays, and unexpected tax bills. Checking your tax code regularly ensures you pay exactly what you owe – no more, no less.
For complex situations such as multiple incomes or benefits, professional advice can save time and money.