UK Tax Codes for 2025 Explained

Although it may look like a small scramble of numbers in the top left-hand side of your payslip, your tax code is actually a crucial part of how much tax you pay. This collection of numbers and letters lets HMRC know how much to deduct from your payslip each month, potentially having a big impact on your net pay.

Read on for your comprehensive guide to UK tax codes in 2025. We’ll look at what tax codes mean, how they’re assigned, and how you can have your tax code updated if it’s been incorrectly applied.

Key Takeaways

• Tax codes are assigned by HMRC based on your income and personal circumstances.
• They’re only applicable to employees on the Pay As You Earn (PAYE) tax scheme.
• These codes let your employer know your income tax rates and how much tax you owe if you’re registered as PAYE.
• If your tax code is incorrect, it’s your responsibility to fix this by contacting HMRC directly. Your employer can’t do this on your behalf.

What Is a Tax Code?

A tax code is a sequence of numbers and letters that tells your employer how much tax to deduct from your Pay As You Earn (PAYE) payslip. Tax codes are only applicable to employees on PAYE.

Tax codes are usually made up of four numbers and one letter, dictating how much personal allowance you get, the rate at which you’re taxed, and whether you receive any tax refunds or owe more. For example, if you’re married, you may have a different tax code from someone who isn’t.

Your tax code is worked out by HMRC based on your income, any benefits you receive, and whether you have other sources of revenue. It’s important to check your tax code regularly. Not checking your tax code could mean paying too much or too little in tax, potentially resulting in a nasty surprise in April.

How To Check Your Tax Code

You can check your tax code through the HMRC website, on your payslip, or through your P60, which you should get every year in April.

Your P60 is a summary of all your earnings, tax payments, and any other deductions for the last year.

Your payslip, on the other hand, is a record of your pay from each pay period. It includes a summary of your pay, National Insurance (NI), tax, and student loan deductions, as well as your tax code.

How Are Tax Codes Assigned

Tax codes are assigned by HMRC based on your earnings and personal circumstances. If HMRC doesn’t know how much you earn, for example, or if you haven’t had a PAYE job before, you’ll be assigned an emergency tax code until HMRC has the information to work one out for you.

Emergency tax codes might mean you pay more tax than necessary. However, once HMRC updates your details, you’ll either automatically get a tax rebate or will have to apply for one. You usually have to apply for a tax rebate if HMRC owes you a small tax refund.

If your circumstances change, such as getting a second job or changing your workplace benefits, your tax code might change, too. It’s worth keeping an eye on your tax code to ensure it’s in line with what you’re expecting.

Most Common UK Tax Codes

The most common UK tax codes include:

1257L

This is the most common tax code in the UK. The numbers denote how much non-taxable allowance you have been allocated. The standard amount is £12,570, meaning you’re only taxed on earnings above this amount. However, if you’re registered for a pre-tax benefit with your employer, like private dental insurance, this number may be different.

The L also means you live and pay tax in England; you’re unmarried and entitled to the standard £12,570 non-taxable allowance.

M

The M tax code will follow your four-digit non-taxable allowance and shows when you subscribe to the Marriage Allowance. This allowance lets you transfer up to £1,260 (or 10%) of your personal tax allowance to your partner. This can help you pay a smaller amount of tax overall, depending on your relative wages.

N

The N tax code is the other tax code in the Marriage Allowance and denotes when you have received 10% of your spouse’s personal tax allowance. This means your partner has transferred up to £1,260 of their personal tax allowance to you, reducing their allowance and increasing yours. It can be beneficial if one of you earns less than the personal allowance threshold, helping to lower your overall tax bill as a couple.

0T

You may see this code if you’ve just started a new job or if you have used up all your non-taxable allowance. This code can sometimes be used as an emergency tax code if HMRC doesn’t know which tax code you should be assigned.

BR

BR means all of your income is taxed at the Basic Rate (BR) of 20%. You get no personal allowance.

This tax code is usually applied to second-job holders or those in receipt of a pension while still working.

S

This code means you work and pay tax in Scotland and subscribe to Scottish tax rates. This code will replace the ‘L’ in English tax codes. So, for example, if you’re a standard-rate taxpayer living in Scotland, your tax code will be 1257S.

C

This code means you work and pay tax in Wales and subscribe to Welsh tax rates. So, for example, if you’re a standard-rate taxpayer living in Wales, your tax code will be 1257C.

W/M1/X

These emergency tax codes are assigned when you have been put on emergency tax. This is usually if you have started a new job or HMRC doesn’t know which tax code to assign you. The different codes denote the frequency of your pay period. For example:

• 1257W: You receive the £12,570 tax allowance and are paid weekly.
• 1257M1: You receive the £12,570 tax allowance and are paid monthly.
• 1257X: You receive the £12,570 tax allowance and are paid on an inconsistent schedule.

Less Common UK Tax Codes

You may also be assigned one of these less common UK tax codes:

K

Having a K before your non-taxable allowance means you have an income that’s not being taxed another way and is worth more than your tax-free allowance.

For example, say you own a rental property that generates a taxable income of more than £12,570 as well as a PAYE job. You’ll have the option not to pay your taxes via self-assessment but instead have them deducted from your salary using a K tax code. This ensures that the tax owed on your additional income is collected gradually rather than requiring a lump sum payment. This would make your tax code K1257L.

HMRC limits how much can be deducted in each pay period to avoid excessive tax deductions.

D0

This tax code means you’re a higher-rate taxpayer, and all your taxable income is taxed at 40%. This is for those who earn between £50,271 and £125,140.

D1

This tax code means all your income is taxed at the additional rate (or advanced rate in Scotland) of 45%. This is for those who earn over £125,140. You also lose your non-taxable allowance at this rate.

NT

You’ll receive this tax code when no tax is applied to your earnings. There are very specific circumstances in which this tax code may be applied, and it’s usually for people with tax exemptions or specific conditions.

For example, students, those in the clergy, or people with certain disability allowances may be entitled to a certain amount of untaxed income. If you receive this code, it’s important to double-check whether it’s correct, as you might still be required to pay tax on other income you have.

How To Correct an Incorrect Tax Code

If your tax code has been registered incorrectly, it’s your responsibility to fix it. Try using the following methods to rectify the issue:

Check your tax details on your HMRC portal

The first thing you need to do is check your current tax code on the HMRC portal. You can also do this by looking at your most recent payslip or P60. This is especially important if you’ve just changed jobs, had a pay rise, or received an unusually large bonus.

Ask yourself:

• Does this code align with your personal circumstances?
• Are there any markers that you’re unclear about?
• Is your net pay roughly what you were expecting to receive?

If you have any concerns about your tax code, it’s best to reach out to HMRC.

Contact HMRC

The easiest way to reach HMRC is by telephone at 0300 200 3300, Monday to Friday, 8 am to 6 pm. HMRC is closed on weekends and bank holidays.

You should have a few details to hand before you contact them. This includes your National Insurance number, current employer details, latest payslip, and other relevant documents like your P60 or P45. This will help HMRC quickly find your details and assist you in correcting your tax code.

Once you’ve provided the necessary information, HMRC will be able to tell you why the tax code is incorrect and guide you through the steps to fix it. In most cases, they’ll either send you a new tax code or make adjustments to your existing one.

You can also start a live chat with HMRC.

Update your code via the HMRC portal

You can also change your tax code via the HMRC self-service portal. All you’ll need is an email address, some personal details, and a government-issued ID, like your current passport or driving licence.

You can use this portal to check your current employment details, how much tax you’ve paid to date, and your expected earnings. If your expected earnings exceed your total compensation, you can update your details to reflect the correct information. Initiating this change will trigger a review of your tax code, which should correct it.

Once your tax code is updated, HMRC will re-calculate your tax code and notify you of any adjustments. You may get a rebate or a tax bill, depending on how much tax you’ve paid so far.

Pre-empt a change

If you know something is going to change your tax code, you can inform HMRC ahead of time to prevent any hiccups in your tax payments. For example, if you’re changing jobs, expecting a promotion, taking on a second job, or drawing down a pension.

Letting HMRC know about your circumstance change can prevent you from accidentally underpaying or overpaying tax. It can also help prevent you from being placed on an emergency tax code and having to claim your overpayments back later.