Full List of Tax Codes and What They Mean (HMRC Guide 2025-26)

Understanding your tax code is important because it affects how much Income Tax you pay through PAYE. Many people in the UK are either on the wrong tax code or do not know what their code means. This can lead to overpaying tax or receiving an unexpected bill later in the year.

This guide explains how UK tax codes work, what each code means, how to check yours and what to do if it looks wrong. It follows simple language so that anyone can understand their tax code without confusion.

What Is a Tax Code?

A tax code is a series of numbers and letters used by HMRC to tell your employer or pension provider how much tax should be taken from your pay. It reflects your personal allowance, tax bands and any adjustments based on your income or benefits.

Your tax code is used only for PAYE income. It does not apply to self assessment tax returns.

Why Understanding Tax Codes Matters

Your tax code affects your take home pay each month. If your code is correct, you will usually pay the right amount of tax across the year. If the code is wrong, the system may take too much or too little tax.

A correct tax code helps you avoid:

• Paying more tax than needed
• Owing tax at the end of the year
• Delays with refunds
• Problems with new jobs or benefits

Many people do not realise their tax code is wrong until HMRC sends a letter. Checking it yourself can prevent problems.

Do Self-Employed People Receive a Tax Code?

Self employed workers do not usually get a tax code unless they also have a job or receive a pension. This is because self employed income is taxed through self assessment.

If you are self-employed and also have employment income, you will have a tax code for the employed part only.

Where to Find Your Tax Code

You can find your tax code in several places, including:

• Your payslip
• Your P60
• Your P45
• Your pension payslip
• Your Personal Tax Account on GOV.UK

HMRC updates your tax code when your income or circumstances change, so it is helpful to check it regularly.

How UK Tax Codes Work

HMRC calculates your tax code based on:

• Your annual personal allowance
• Income from jobs and pensions
• Benefits in kind
• Tax owed from earlier years
• Tax reliefs or allowances
• Marriage Allowance
• Adjustments for higher rate taxpayers

For most people, the tax code shows how much tax free income they are allowed in the tax year. If you are entitled to the full personal allowance, your code will reflect that.

How Tax Codes Are Structured (Numbers + Letters Explained)

Tax codes usually have:

• A number
• A letter

The number tells your employer how much tax free income you get. To work out the amount, you add a zero to the end.
Example: 1257 means £12,570 tax free.

The letter shows how tax should be applied. Different letters apply in different parts of the UK or depending on your situation.

Understanding the Letters and Numbers in UK Tax Codes

L – Standard Personal Allowance

The letter L means you are entitled to the standard personal allowance. Most workers in England, Wales and Northern Ireland will have an L in their code unless they have special adjustments.

1257L – Standard Tax Code Example

1257L is the most common UK tax code. It means you get the full personal allowance of £12,570.

People on this code usually have one job, no special benefits and no tax adjustments.

BR – Basic Rate Tax on Second Jobs

BR means you pay tax at 20 percent on all income from that job or pension. You will not get a personal allowance on this income.

This code is used when you have more than one job and your first job already uses up your allowance.

D0 and D1 – Higher and Additional Rate Codes

These codes apply when all the income from a job must be taxed at higher rates.

• D0 taxes all income at 40 percent
• D1 taxes all income at 45 percent

These are common for people with multiple sources of income.

M and N – Marriage Allowance Transfers

Marriage Allowance lets one spouse transfer part of their personal allowance to the other.

• M means you receive a transfer
• N means you give away part of your allowance

These letters adjust the amount of tax free income you have.

T – Special Circumstances Tax Code

A T code means HMRC needs to review something about your income or allowances. It is often used where personal allowances are adjusted for specific reasons.

K – Tax on Benefits or Other Income

A K code means you have taxable income or benefits that are not taxed through PAYE. This reduces your tax free allowance, and you may pay tax on more of your income.

K codes can occur when:

• You get company benefits
• You owe tax from a previous year
• You have untaxed income

NT – No Tax Deducted

NT means no tax is taken from your income. This may apply to certain pensions or income that is exempt from UK tax.

0T – No Personal Allowance

The 0T code is used when you have no personal allowance left or HMRC does not have enough information to apply one. All income is taxed.

C, C0T, CBR, CD0, CD1 – For Wales

These codes apply to workers who live in Wales. The tax bands are slightly different from England and Northern Ireland, so the letter C tells your employer to use Welsh tax rates.

S, S0T, SBR, SD0, SD1, SD2, SD3 – For Scotland

These codes apply to people who live in Scotland. Scotland has different tax bands and rates, so the S letter helps employers apply the correct Scottish rules.

Emergency Tax Codes

Emergency codes are temporary and used when HMRC has not yet confirmed your correct tax details. They allow you to be paid without delay but can result in overpayment or underpayment.

W1 – Week 1

W1 is a non cumulative code. It means your tax for the week is worked out as if it is the first week of the year.

M1 – Month 1

M1 works the same as W1 but on a monthly basis. Each month is treated as the first month of the tax year.

X – Emergency Non Cumulative Code

X is used as an emergency marker. It can appear with codes like 1257L X. It means your tax is calculated without taking earlier pay into account.

Full List of UK Tax Codes (England, Scotland and Wales)

Understanding tax codes can be confusing, especially when they include different letters for England, Scotland and Wales. To make things easier, the table below gives you a quick view of what each code usually means. You can use it to check whether your payslip looks correct before reading the detailed explanations that follow.

Below is an overview of common tax code letters across the UK.

Tax Code Letters in England and Northern Ireland

These letters apply to most taxpayers in England and Northern Ireland. Each one shows how your personal allowance and tax bands should be used.

L – Standard Personal Allowance

This is the most common code. It means you receive the full personal allowance for the year. Employees with no adjustments or benefits usually have an L code.

M – Marriage Allowance Received

The M letter shows that you receive part of your partner’s personal allowance. This increases your tax free income.

N – Marriage Allowance Transferred

N means you transfer part of your personal allowance to your partner. This reduces your own tax free amount.

T – Review Needed by HMRC

T is used when your tax position involves special adjustments. HMRC requires regular checks to make sure your allowances are correct.

K – Negative Allowances (Benefits or Underpayments)

A K code means your deductions are higher because you have taxable benefits, untaxed income or money owed from previous years. It reduces your tax free amount.

BR – Basic Rate Only

All income from this job or pension is taxed at 20 percent. This is often used for second jobs where your allowance is already used elsewhere.

D0 – Higher Rate Only

All income is taxed at 40 percent. This is used when you already use your allowance and basic rate band elsewhere.

D1 – Additional Rate Only

All income is taxed at 45 percent. This applies when you are already in the highest income bracket from other sources.

NT – No Tax Deducted

No tax is taken from this income. NT is usually used for certain pensions or special payments that are not subject to UK tax.

0T – No Personal Allowance Applied

Income is taxed without a personal allowance. This is used when HMRC does not have enough information or your allowance has been fully used.

Tax Code Letters in Scotland

Scottish residents have different tax bands from the rest of the UK. The S prefix tells employers to use Scottish Income Tax rates.

S – Standard Scottish Tax Code

The S prefix shows you pay tax using Scottish bands and thresholds.

SBR – Scottish Basic Rate Only

All income from this job is taxed at the Scottish basic rate. No personal allowance is applied.

SD0 – Scottish Intermediate Rate

All income is taxed at the intermediate rate. This is used when earlier income already uses your lower bands.

SD1 – Scottish Higher Rate

All income is taxed at the Scottish higher rate. This applies only when your basic allowances are used elsewhere.

SD2 – Scottish Advanced Rate

Tax is applied at the advanced rate for higher earnings.

SD3 – Scottish Top Rate

All income is taxed at the top Scottish tax rate. This applies to high earners with multiple income sources.

S0T – No Allowance for Scottish Taxpayers

Income is taxed using Scottish bands with no personal allowance. This usually happens when HMRC has incomplete details.

Tax Code Letters in Wales

Welsh taxpayers have their own Income Tax rules. The C prefix tells employers to apply the Welsh tax bands.

C – Standard Welsh Tax Code

C shows that you live in Wales and are taxed using Welsh bands.

CBR – Welsh Basic Rate Only

All income is taxed at the Welsh basic rate. This usually applies to second jobs.

CD0 – Welsh Higher Rate

Income is taxed at the Welsh higher rate because your lower bands are already used elsewhere.

CD1 – Welsh Additional Rate

All income is taxed at the additional rate for high earners in Wales.

C0T – Welsh Code With No Allowance

Tax is applied with no personal allowance, using Welsh bands. This code is used when HMRC does not hold enough information.

Special Tax Rules for Contractors and Freelancers

Contractors and freelancers have tax rules that depend on how they trade.

You may receive a tax code if:

• You have a part time job alongside contracting
• You take a pension
• You work through an umbrella company

If you are a limited company contractor, your salary is taxed under PAYE so you will have a tax code. Dividends are taxed separately through self assessment.

Umbrella workers often receive emergency tax codes when they change umbrellas or clients. Checking your code each time you join a new payroll can prevent overpayments.

If you run a limited company, it is also useful to understand the current audit threshold, as it affects whether your business needs a statutory audit alongside normal tax reporting.

How to Check and Update Your Tax Code

You can check your code in several ways:

• Payslip from your employer
• Pension statement
• Personal Tax Account on GOV.UK
• HMRC letters

If your tax code changes, HMRC will normally send you a notice explaining the reason.

What to Do If Your Tax Code Is Wrong

If you notice a mistake, you should contact HMRC. You can:

• Phone HMRC
• Use your Personal Tax Account
• Ask your employer to recheck your details

HMRC may update your code immediately and send a new instruction to your employer.

Common Reasons Your Tax Code Might Change

Your code can change for many reasons, including:

• New job or second job
• Salary change
• Company car or other benefits
• Pension income
• Marriage Allowance
• Tax owed from previous years
• Switch to Scottish or Welsh residency

Sometimes the change is temporary, especially after starting a new job.

How to Avoid Paying the Wrong Tax

A few checks can help you stay on the correct code throughout the year:

• Review your payslips
• Check your Personal Tax Account
• Report changes in circumstances quickly
• Keep HMRC updated if you move home
• Make sure your employer has your correct start forms

You do not need to be an expert in tax codes. A simple regular check can prevent unexpected bills.

If you need help checking your code or want a clear explanation of how it affects your take home pay, our UK Expert Accountants can review your tax position and guide you step by step.

FAQs

What Does Tax Code 1257L Mean?

It means you have the standard personal allowance of £12,570. It is the most common tax code for UK workers.

What Does a Cumulative Tax Code Mean?

A cumulative code means each payment period takes into account your total pay for the year so far. This helps ensure the correct tax is paid across the year.

What Is an Emergency Tax Code?

An emergency code is used when HMRC does not have enough information about you. It is usually temporary and can cause overpayments until updated.

What Should I Do If I Have Multiple Tax Codes?

If you have more than one job or pension, this is normal. One source of income will get your allowance and the others will get codes like BR or 0T. If it looks wrong, contact HMRC.

Why Has My Tax Code Changed?

It may have changed because your income, benefits or personal allowance changed. HMRC also updates codes when you start a new job or receive taxable benefits.

Can I Change My Tax Code Myself?

No, only HMRC can change your tax code. You can contact them if you think your code is wrong.

What Happens If My Tax Code Is Wrong?

If your code is wrong, you may pay too much or too little tax. HMRC will normally correct this once they have the right information.

How Much Will I Earn After Tax?

Your take home pay depends on your tax code, income level and National Insurance contributions. You can use HMRC’s online calculator for an estimate.