PAYE Notice of Coding

A PAYE Notice of Coding – also known as form P2 – is a letter sent by HMRC giving you your tax code and outlining the reasons you were given this tax code. Knowing your tax code is important because your employer deducts tax from your salary through the Pay As You Earn (PAYE) system, as well as your eligibility for a Personal Allowance.

It’s important to double check that all of the information and the tax code listed on your PAYE Notice of Coding is accurate. If your tax code is incorrect, you might be paying the wrong amount of tax. The most common tax code in the 2023/2024 tax year is 1250L.

For more information about tax codes, read our helpful glossary page giving more detail!

Frequently Asked Questions

  • How does PAYE work?

    PAYE (short for “Pay As You Earn”) is a way of paying Income Tax and National Insurance through your salary if you’re an employee. Your employer will do this automatically for you based on your tax code, then send the taxes over to HMRC.

  • What is a Personal Allowance for income tax?

    You only have to pay Income Tax on the income above your Personal Allowance, which is a tax-free allowance that everyone in the UK has. In the 2023/2024 tax year, the Personal Allowance is £12,570.

Search More Terms

News & Insights

Tax
3 days ago

Tax on Crypto Currency and Digital Assets

Tax on Crypto Currency and Digital Assets is a rapidly evolving regulatory landscape. For cryptocurrency and digital ass...
Tax on Crypto Currency and Digital Assets is a rapidly evolving regulatory landscape. For cryptocurrency and digital assets in the UK, companies and individuals need to plan ahead to ensure compliance with their tax obligations. H...
Uncategorized
4 weeks ago

Freelancer Tax Tips UK

The financial challenges of freelancing are often a burden most people don’t anticipate. Over the years, the prices ch...
The financial challenges of freelancing are often a burden most people don’t anticipate. Over the years, the prices charged are increasing faster than the personal tax rate bands. As a result of this, freelancers who would have ...
Tax
1 month ago

VAT Filing Deadlines 2025 and How to Prepare

What are the VAT filing deadlines UK 2025, how do you prepare for VAT compliance and what is VAT? Value Added Tax (VAT) ...
What are the VAT filing deadlines UK 2025, how do you prepare for VAT compliance and what is VAT? Value Added Tax (VAT) is a tax added to goods and services sold by businesses that are registered for VAT. Businesses in the UK, hav...
Tax
2 months ago

VAT Mistakes and How to Avoid Them

Completing VAT returns can be challenging for small business owners, with substantial legislation and rules complicating...
Completing VAT returns can be challenging for small business owners, with substantial legislation and rules complicating matters further. It can be quite easy to make a mistake if you are not well versed in UK VAT legislation. At ...
Tax
2 months ago

HMRC Voluntary Disclosure Guide

Whether you are self-employed or run your own business, managing taxes can be daunting. Occasionally mistakes can happen...
Whether you are self-employed or run your own business, managing taxes can be daunting. Occasionally mistakes can happen, but fortunately HMRC allow you an opportunity to rectify any mistakes through a voluntary disclosure. This a...
Tax
2 months ago

Financial Consulting Services

Financial consulting services cover a range of advisory activities designed to help companies manage finances effectivel...
Financial consulting services cover a range of advisory activities designed to help companies manage finances effectively. An accountant can provide this, with the expertise and knowledge needed to help you manage finances. The pr...
Tax
2 months ago

Tax on Instagram Earnings: A Guide for Content Creators

UK tax on Instagram earnings is something most creators fail to account for. Instagram has become more than just a place...
UK tax on Instagram earnings is something most creators fail to account for. Instagram has become more than just a place to share videos. It’s an avenue for content creators to monetise their creativity. Whether you’re...
Expert Piece
2 months ago

Budget 2024 Impact on Businesses

The Autumn Budget 2024 will have an impact on businesses in the UK. As announced, taxes are set to rise by £40 billion,...
The Autumn Budget 2024 will have an impact on businesses in the UK. As announced, taxes are set to rise by £40 billion, with a substantial £25 billion coming from increased employers’ national insurance contributions. This...
Load More View All

Subscribe Now

Receive our latest news & insights directly to your fingertips.