Tax Codes Guide UK (How They Work, Check Yours 2026)

What Is a Tax Code and How It Works

A tax code is a combination of numbers and letters that HMRC issues to tell your employer how much tax-free pay you should receive in a tax year. The number (usually multiplied by 10) represents your tax-free Personal Allowance. For example, code 1257L means you can earn £12,570 before paying income tax — the standard Personal Allowance for 2026/27. The letter indicates your tax situation — L means you are entitled to the standard allowance, while other letters apply if you owe tax from a previous year, receive company benefits, or have multiple jobs. Your employer uses this code in their payroll software to calculate the correct tax deduction from each payslip. If you have more than one job or pension, each may have a different code that shares your total Personal Allowance across income sources. HMRC typically updates your code automatically each year, but you should check it on your Personal Tax Account on gov.uk to make sure it is correct.

Common Tax Codes Explained

Here are the most common UK tax codes for 2026/27 and what they mean:

• 1257L — The standard tax code for most employees and pensioners. You are entitled to the full £12,570 Personal Allowance and pay basic rate (20%) on income above that.
• BR — All your income from this source is taxed at the basic rate (20%). Used for a second job or pension when you have already used your Personal Allowance against your main income.
• D0 — All income from this source is taxed at the higher rate (40%). Used for a second job or pension when your total income exceeds the higher-rate threshold.
• D1 — All income from this source is taxed at the additional rate (45%). For high earners with income exceeding £125,140.
• NT — No tax is deducted from this income. Rare — usually for people who are non-UK resident or have specific tax exemptions.
• K codes (e.g. K475) — You owe tax on income that exceeds your Personal Allowance. The K prefix means your tax-free amount is negative, so extra tax is collected through PAYE. Common if you owe tax on company benefits or owe tax from a previous year.
• T — HMRC is reviewing your tax code, often because your circumstances are complex or they need more information.
• 0T — You have no Personal Allowance, usually because HMRC does not have enough information to calculate your code. This is common for new employees or those who have not submitted a tax return.

How Your Tax Code Is Calculated

HMRC calculates your tax code based on your estimated total income for the tax year and your available deductions and reliefs. The starting point is the standard Personal Allowance (£12,570 for 2026/27). HMRC then adjusts this figure for: benefits in kind such as a company car or private health insurance (the taxable value is deducted from your allowance); State Pension if you receive it (the amount is deducted from your Personal Allowance); tax owed from previous years if you underpaid through PAYE; married couple's allowance or other reliefs you are entitled to; and income from multiple jobs or pensions (your allowance may be split between them). The final figure is divided by 10 and appended with the appropriate letter. For example, if you have a company car worth £4,000 per year in benefit-in-kind, HMRC deducts this from £12,570 to get £8,570 — giving a tax code of 857L. If deductions exceed your Personal Allowance, you receive a K code meaning additional tax is collected through your pay. You can see exactly how your code is calculated in your Personal Tax Account.

How to Check Your Tax Code

You should check your tax code at the start of each tax year (6 April) and whenever your circumstances change. The easiest way is through your Personal Tax Account on gov.uk, where you can view your current tax code, see how it was calculated, and report changes. You can also find your tax code on your: payslip (usually in the pay details section); P60 form (your annual tax summary); coding notice (form P2 or PAYE Coding Notice) sent by HMRC by post or online; and HMRC app which shows a summary of your tax information. Check that the number in your code is roughly correct — for 2026/27 it should typically be 1257L if you have one job and no company benefits. If you have more than one job, check that your total Personal Allowance is divided appropriately. Never rely on your employer to tell you if your code is wrong — they only use the code HMRC gives them. If your code changes mid-year, you should receive a new coding notice explaining why.

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. Use your Personal Tax Account online to review the calculation and report any errors, such as a company benefit you no longer receive or a change in your estimated income. You can also call HMRC's Income Tax helpline on 0300 200 3300 (lines are open Monday to Friday, 8am to 6pm). If the error is on your employer's side — for example, they told HMRC you have a company car but you no longer do — ask them to update HMRC. In some cases, HMRC may issue a revised tax code effective immediately, and your employer will implement it within 30 days. If you have overpaid tax due to a wrong code, HMRC will refund you automatically through your payslip or as a cheque. Underpayments of less than £3,000 are usually collected through your tax code the following year. If you disagree with HMRC's decision, you can appeal through the official complaints process or ask for a review by an HMRC officer not involved in your case. For persistent errors, consider using a tax adviser or accountant — see our Tax Adviser guide →

Emergency Tax Codes and Refunds

When you start a new job or receive your first pension payment, your employer may use an emergency tax code if HMRC has not yet provided your correct code. Emergency tax codes are typically on a non-cumulative basis (week 1 or month 1 basis), meaning each pay period is treated separately with no carry-forward of unused allowances. Common emergency codes include 1257L on a week 1/month 1 basis (shown as 1257L W1 or 1257L M1 on your payslip). This can result in overpaying tax if you were not earning in earlier months of the tax year. If you are on emergency tax, you will usually receive a tax refund automatically once HMRC issues your correct code. Refunds are paid through your payslip in the next pay run after the correction. If you have been on emergency tax for a previous tax year and have not received a refund, you can claim a refund online through your Personal Tax Account or by completing form P50 if you have stopped working. Read our Tax Refund guide → for step-by-step instructions on claiming money back from HMRC.

FAQs

How do I find my tax code?

Your tax code appears on your payslip, P60, or in your Personal Tax Account on gov.uk. HMRC also sends a PAYE Coding Notice (form P2) when your code changes.

What does the L in 1257L mean?

The L means you are entitled to the standard Personal Allowance. It replaced the previous "L" suffix after the marriage allowance transfer was restricted. Other letters indicate different circumstances, such as K for negative allowance or T for a code under review.

Can I have two different tax codes?

Yes. If you have multiple jobs or pensions, each source of income may have a different code. Your total Personal Allowance is distributed across them, or one job receives the full allowance and others are coded BR, D0, or D1.

What happens if my tax code is wrong?

If your code is too high, you underpay tax and may receive a tax bill later. If it is too low, you overpay and HMRC should refund you automatically. Contact HMRC via your Personal Tax Account or by phone to correct any errors.

What is an emergency tax code and how do I stop it?

An emergency tax code (marked W1 or M1) is used when HMRC has insufficient information. Give your new employer your P45 and ensure they submit your starter checklist correctly. Your code will update automatically once HMRC processes your details.