Tax Code

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.

  • L – You’re getting the standard tax-free Personal Allowance. This is the most common tax code
  • M – 10% of your spouse’s Personal Allowance is assigned to you through Marriage Allowance
  • N – 10% of your Personal Allowance is assigned to your spouse through Marriage Allowance
  • S – You’re on the Scottish rate of Income Tax
  • T – Your tax code includes other calculations
  • Y – You are entitled to a higher Personal Allowance because you were born before 6th April 1938
  • OT – Your Personal Allowance has been used up or you’ve recently started a new job
  • BR – You’re getting the basic rate (20%)
  • DO – You’re getting the higher rate (40%)
  • D1 – You’re getting the additional rate (45%)
  • NT – You’re getting the additional rate (45%)
  • K – You have income that isn’t being taxed but is worth more than your Personal Allowance

For further advice about your tax code and Personal Allowance, contact HMRC.

Frequently Asked Questions

  • How much is the standard tax-free Personal Allowance?

    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.

  • Where can I find my tax code?

    Your tax code will be listed on your payslip, P45P60 and in your online Personal Tax Account.

Search More Terms

View our latest news & insights

14 February 2024
Navigating the landscape of business taxes in the UK can seem daunting, especially given the range of taxes that might a...
Navigating the landscape of business taxes in the UK can seem daunting, especially given the range of taxes that might apply to your organization. However, understanding which taxes are relevant to your business is crucial for com...
17 January 2024
Your business has costs to deal with and pay as part of their day-to-day trade and as part of ad hoc strategies. They ty...
Your business has costs to deal with and pay as part of their day-to-day trade and as part of ad hoc strategies. They typically range from phone line bills, postage and stationery to computer software and travel costs. Being the o...