Your tax code is used by your employer or pension provider to establish how much Income Tax should be deducted from your pay or pension to be sent to HMRC. In the 2023/2024 tax year, the most common tax code is 1257L. If this is not your tax code and you don’t know why, it may be that you’re on an emergency tax code and could likely be paying too much Income Tax. If you have reason to believe that you may be on the wrong tax code, contact HMRC via their website , and they will be best placed to advise you.
We’ve put together a helpful guide to explain what the letters in your tax code mean.
For further advice about your tax code and Personal Allowance, contact HMRC.
The Personal Allowance is the amount of tax-free income that everyone in the UK is entitled to receive each year. The Personal Allowance currently stands at £12,570. You will only be taxed on anything that you earn beyond this amount. However, if you earn over £100,000 per annum, your Personal Allowance is reduced by £1 for every £2 you earn above the £100,000 threshold. To that end, once your income reaches £125,140, you lose your Personal Allowance completely.