How To Check Your Tax Code?
- MAZ
- Jul 30
- 16 min read
Updated: Sep 14
The Audio Summary of the Key Points of the Article:
Decoding Your Tax Code – The Basics You Need to Know
So, you’ve glanced at your payslip and noticed a mysterious code like 1257L staring back at you. What does it mean, and why should you care? Your tax code is the key to how much tax gets deducted from your pay or pension, and getting it wrong can mean you’re either overpaying or facing a surprise tax bill. For UK taxpayers and business owners, checking your tax code is a must to keep your finances on track. In this first part, we’ll break down what a tax code is, where to find it, and why it matters, with all the latest figures for the 2025/26 tax year.
What Exactly Is a Tax Code?
Let’s start at the beginning: your tax code is a combination of numbers and letters that tells your employer or pension provider how much tax to deduct from your income under the Pay As You Earn (PAYE) system. HM Revenue and Customs (HMRC) calculates it based on your personal circumstances, like your income, benefits, or allowances. For the 2025/26 tax year, the standard personal allowance is £12,570, meaning you can earn this amount before paying income tax. Most people with one job or pension will have the tax code 1257L, where “1257” represents £12,570 divided by 10, and “L” stands for the standard personal allowance.
But here’s the kicker: your tax code isn’t just about your personal allowance. It can include adjustments for things like company benefits (e.g., a car or health insurance), untaxed income (like a state pension), or even underpaid tax from previous years. If you’ve got multiple jobs or a complex financial setup, your tax code can get tricky fast.
Where Can You Find Your Tax Code?
Now, don’t panic if you’re not sure where to look for your tax code. It’s easier than you think. Your tax code appears on several documents:
● Payslips: Check your latest payslip, usually under a section labelled “Tax Code” or “PAYE Code.”
● P45: If you’ve recently left a job, your P45 form from your previous employer will list your tax code.
● P60: Your end-of-year P60 form, provided by your employer, includes your tax code for the tax year.
● Pension Advice Slip: If you receive a private pension, this slip will show your tax code.
● HMRC Correspondence: Look for a PAYE Coding Notice (Form P2), which HMRC sends out, often in January or February, detailing your tax code for the upcoming tax year. If you’ve opted for digital notifications, you’ll get an email prompting you to check your Personal Tax Account.
If you can’t find these documents, don’t worry. You can check your tax code online through HMRC’s Personal Tax Account or the HMRC app, which we’ll cover in detail later.
Why Checking Your Tax Code Is Crucial
Be careful! Around 15% of PAYE taxpayers in the UK end up with the wrong tax code each year, leading to overpaid or underpaid tax. Overpaying means you’re giving HMRC an interest-free loan, while underpaying could land you with a hefty tax bill later. For business owners, ensuring your employees’ tax codes are correct is just as important to avoid payroll errors and keep your team happy.
Let’s look at a quick example. Meet Priya, a graphic designer in Leeds with two part-time jobs. Her main job uses the standard 1257L code, but her second job incorrectly uses the same code instead of BR (Basic Rate, taxing all income at 20%). She’s overpaying tax because her personal allowance is being split across both jobs. By checking her tax code, Priya could fix this and claim a refund, potentially worth hundreds of pounds.
Understanding Common Tax Codes for 2025/26
So, what do those letters and numbers mean? Here’s a breakdown of the most common tax codes for the 2025/26 tax year, based on the latest HMRC guidance:
Tax Code | Meaning | Who It Applies To |
1257L | Standard personal allowance of £12,570, no special circumstances | Employees or pensioners with one income source |
BR | All income taxed at the basic rate (20%) | Second jobs or pensions with no personal allowance |
0T | No personal allowance, income taxed at appropriate rates | High earners (over £100,000) or those with no allowance |
K | Negative allowances, more tax deducted | People with untaxed income (e.g., state pension) exceeding allowances |
S1257L | Scottish personal allowance (£12,570) | Scottish taxpayers with one income source |
NT | No tax deducted | Rare cases, e.g., income below taxable threshold |
Note: Scottish taxpayers have unique codes starting with “S” due to different tax rates (e.g., SBR for 20% basic rate). Welsh taxpayers may see codes starting with “C” (e.g., C1257L).
This table covers the basics, but tax codes can get more complex. For instance, a K code like K543 means you have £5,430 in untaxed income (e.g., a state pension) that exceeds your allowances, so extra tax is deducted to cover it.
How Tax Codes Affect Your Pay
Now, consider this: your tax code directly determines your take-home pay. The number in your tax code (e.g., 1257) is multiplied by 10 to calculate your tax-free allowance. For 1257L, that’s £12,570 per year, or £1,047.50 per month. Anything you earn above this is taxed at the appropriate rate:
● Basic Rate: 20% on income from £12,571 to £50,270.
● Higher Rate: 40% on income from £50,271 to £125,140.
● Additional Rate: 45% on income above £125,140.
For business owners, understanding your employees’ tax codes is critical. If an employee’s code is wrong, you might deduct too much or too little tax, leading to payroll disputes or HMRC penalties. For example, if you’re a small business owner in Manchester and your new hire, Ewan, doesn’t provide a P45, you might use an emergency tax code (e.g., 1257L M1). This could overtax him until HMRC updates the code, affecting his morale and your business’s reputation.
Common Reasons Your Tax Code Might Be Wrong
None of us is a tax expert, but knowing why tax codes go wrong can save you a headache. HMRC relies on accurate information from you and your employer, but mistakes happen.
Here are the top reasons for incorrect tax codes:
● Change in Employment: Starting a new job without a P45 can lead to an emergency tax code.
● Multiple Income Sources: Having two jobs or a job plus a pension can confuse your allowances.
● Company Benefits: Benefits like a company car or private healthcare might not be factored in correctly.
● Income Changes: A pay rise or starting a state pension can shift your tax code.
● HMRC Errors: Sometimes, HMRC’s data is outdated or incorrect, especially if you haven’t updated your details.
In 2023/24, HMRC reported that around 4 million taxpayers received tax calculation letters (P800 forms) due to incorrect tax codes, with many eligible for refunds. Checking your code early can prevent these issues.
Tools to Check Your Tax Code
Now, it shouldn’t surprise you that HMRC has made it easier to check your tax code online.
You can use:
● Personal Tax Account: Sign in or create an account at www.gov.uk/personal-tax-account. You’ll need your National Insurance number and a form of ID (e.g., passport or driving licence) to verify your identity.
● HMRC App: Download the free HMRC app to view your tax code, estimated income, and tax paid for the current year (6 April 2025 to 5 April 2026).
● HMRC’s Online Tool: Use the “Check what your tax code means” tool at www.gov.uk/tax-codes to understand your code by entering your code and estimated income.
These tools are user-friendly and don’t require a degree in accounting. They also let you update your income details to ensure your tax code stays accurate.
UK Tax Code Explainer & Finder
Taking Action – How to Check and Fix Your Tax Code
Right, so you’ve got a handle on what your tax code is and why it matters. Now let’s get practical. Checking your tax code isn’t just about spotting a number on your payslip – it’s about making sure it’s correct and taking action if it’s not. In this part, we’ll walk you through a step-by-step guide to check your tax code, dive into what to do if it’s wrong, and explore some tricky scenarios that UK taxpayers and business owners might face in the 2025/26 tax year. We’ll also throw in some real-world examples to keep things grounded.
How Do You Check Your Tax Code Step-by-Step?
Let’s make this as straightforward as possible. Checking your tax code is something you can do in minutes, whether you’re a full-time employee, a freelancer juggling multiple gigs, or a business owner sorting out PAYE for your team. Here’s a step-by-step guide to get it done:
Locate Your Tax Code: Check your latest payslip, P45, P60, or pension advice slip. If you’ve got a PAYE Coding Notice from HMRC, it’ll be there too. Can’t find any of these? No stress – move to step 2.
Log into Your Personal Tax Account: Head to www.gov.uk/personal-tax-account. Sign in or set up an account using your National Insurance number and an ID like a passport or driving licence. Once in, you’ll see your tax code under the “Income Tax” section.
Use the HMRC App: Download the HMRC app from the App Store or Google Play. After logging in, you can view your tax code, estimated income, and tax paid for the 2025/26 tax year. It’s handy for quick checks on the go.
Verify the Code: Compare the tax code on your payslip or documents with what’s in your Personal Tax Account or app. They should match. If not, contact your employer or pension provider to confirm which code they’re using.
Understand Your Code: Use HMRC’s online tool at www.gov.uk/tax-codes to decode what your tax code means. Enter your code and estimated annual income to see if it aligns with your circumstances.
Check for Updates: HMRC may update your tax code during the year if your income or benefits change. Look out for emails or letters from HMRC, especially in early 2025, when coding notices for 2025/26 are sent out.
This process is quick, and HMRC’s digital tools are designed to be user-friendly. If you’re a business owner, you can also use the PAYE for Employers service on www.gov.uk to check your employees’ tax codes, ensuring your payroll is spot-on.
What If Your Tax Code Is Wrong?
Be careful! A wrong tax code can mess with your finances, either leaving you short-changed or owing HMRC later. If your tax code doesn’t match your circumstances – say, it’s 0T when you’re expecting 1257L – here’s what to do:
● Contact HMRC: Call HMRC’s Income Tax helpline at 0300 200 3300 (open 8am to 6pm, Monday to Friday) or use the online form in your Personal Tax Account. Explain the issue and provide details like your National Insurance number, income sources, and any recent changes (e.g., new job or company car).
● Provide Evidence: Have your payslips, P45, or P60 handy. If you’ve received benefits like a company car, gather details from your employer. HMRC may ask for this to recalculate your code.
● Request a Refund: If you’ve overpaid tax due to an incorrect code, HMRC will issue a refund, often within 30 days, either directly to your bank account or via your employer. In 2023/24, HMRC processed over £1.2 billion in refunds for PAYE taxpayers.
● Update Your Employer: If HMRC issues a new tax code, ensure your employer or pension provider applies it promptly to avoid further errors.
Let’s take a case study. Imagine Tariq, a self-employed carpenter in Bristol who also works part-time at a hardware store. His store job incorrectly uses a BR code, taxing all his earnings at 20% because HMRC didn’t know about his self-employment income. By checking his Personal Tax Account, Tariq spots the error, contacts HMRC, and gets his code updated to 1257L, saving £600 in overpaid tax for 2024/25.
Common Scenarios That Trip Up Tax Codes
Now, consider this: tax codes can get complicated if your life isn’t a simple 9-to-5. Here are some scenarios where things often go awry, especially for UK taxpayers and business owners:
● Multiple Jobs: If you have two jobs, your personal allowance should typically apply to your main job (1257L), with the second job taxed at the basic rate (BR) or higher rate (D0). Mistakes here are common, especially if employers don’t coordinate.
● Company Benefits: Benefits like a company car or private healthcare reduce your tax-free allowance. For example, a £30,000 car with a 30% taxable benefit adds £9,000 to your taxable income, lowering your tax code to, say, 357L (£3,570 tax-free allowance).
● Emergency Tax Codes: Starting a new job without a P45 often leads to an emergency code like 1257L M1 (month 1, non-cumulative). This can overtax you until HMRC updates it.
● Scottish or Welsh Taxpayers: If you live in Scotland or Wales, your tax code starts with an S or C, reflecting different tax rates. Moving across UK nations can cause mix-ups if HMRC isn’t informed.
For business owners, managing employee tax codes adds another layer. Say you run a café in Cardiff and hire Sioned, a new barista. Without a P45, you apply an emergency code, but she’s overtaxed for three months. Checking her code via HMRC’s PAYE tools and updating it promptly keeps her pay accurate and avoids complaints.
Tax Code Adjustments for 2025/26
So, what’s new for the 2025/26 tax year? HMRC has confirmed the personal allowance remains at £12,570, frozen until 2028 due to fiscal policy. However, tax bands have slight adjustments:
Tax Band | Income Range | Rate | Notes |
Personal Allowance | Up to £12,570 | 0% | Frozen until 2028 |
Basic Rate | £12,571–£50,270 | 20% | Applies to most employees |
Higher Rate | £50,271–£125,140 | 40% | Common for senior professionals |
Additional Rate | Over £125,140 | 45% | High earners, rare |
Scottish Rates (for S-coded taxpayers):
● Starter Rate: 19% on £12,571–£14,876
● Basic Rate: 20% on £14,877–£26,561
● Intermediate Rate: 21% on £26,562–£43,662
● Higher Rate: 42% on £43,663–£125,140
● Top Rate: 47% over £125,140
If your tax code doesn’t reflect these bands or your residency (e.g., S for Scotland), you could be overpaying. For example, a Scottish taxpayer with a 1257L code instead of S1257L might pay English rates (20%) instead of the Scottish intermediate rate (21%), leading to underpayment and a future tax bill.
Rare Scenarios to Watch Out For
Now, here’s where things get interesting. Some less common situations can seriously affect your tax code:
● K Codes: If you have untaxed income (e.g., a state pension or rental income) exceeding your personal allowance, you might get a K code. For instance, K200 means £2,000 is added to your taxable income, increasing deductions. In 2024/25, HMRC reported 250,000 taxpayers had K codes, often causing confusion.
● Marriage Allowance Errors: If you’ve transferred 10% of your personal allowance to your spouse via Marriage Allowance, your code might be 1131M (£11,310 allowance). If this isn’t applied correctly, you could lose out.
● High Earners: If your income exceeds £100,000, your personal allowance tapers by £1 for every £2 above £100,000. At £125,140, it’s zero, leading to a 0T code. This caught out 1.1 million taxpayers in 2023/24, per HMRC data.
For business owners, these scenarios can affect employees too. If your star salesperson, Aisling, earns £130,000 and has a 1257L code instead of 0T, she’s underpaying tax, which could lead to a big bill later. Regularly checking employee codes via HMRC’s PAYE tools can prevent this.
UK Tax Code Explainer
Key Takeaways for Mastering Your Tax Code in 2025
Alright, you’ve now got a solid grip on what your tax code is, how to check it, and what to do if it’s gone haywire. This final part pulls together the most critical points to ensure you, whether a UK taxpayer or business owner, stay on top of your tax code for the 2025/26 tax year. No fluff, just the essentials to keep your finances in check and avoid those dreaded HMRC surprises. Let’s wrap it up with a clear, concise summary of the must-knows, designed to stick with you.
Top 10 Must-Know Points for Your Tax Code
Your tax code, like 1257L, tells your employer or pension provider how much tax to deduct under PAYE, based on your personal allowance (£12,570 for 2025/26).
You can find your tax code on payslips, P45s, P60s, pension statements, or HMRC’s PAYE Coding Notice, sent annually around January or February.
The easiest way to check your tax code is through your Personal Tax Account or the HMRC app, using your Government Gateway ID and National Insurance number.
Tax code letters (e.g., L, BR, K, S, C) indicate specific circumstances, like standard allowances, second jobs, untaxed income, or Scottish/Welsh tax rates.
Emergency tax codes (e.g., 1257L W1/M1) are temporary and can lead to overtaxing if not corrected after job changes or missing P45s.
Incorrect tax codes, affecting about 15% of PAYE taxpayers annually, can result from job changes, multiple incomes, benefits, or outdated HMRC records.
To fix a wrong tax code, update your details in your Personal Tax Account, call HMRC at 0300 200 3300, or provide evidence like payslips to request a correction or refund.
K codes, like K500, signal untaxed income exceeding your allowance, requiring extra tax deductions—verify these in your Personal Tax Account.
Business owners must check employee tax codes via HMRC’s P9 notices or payroll software, using emergency codes for new staff without P45s.
Prevent errors by regularly checking payslips, updating HMRC on life changes, and reviewing your P60 or Coding Notice each spring.
Why Staying Proactive Pays Off
Now, let’s hammer this home: keeping an eye on your tax code isn’t just about avoiding headaches—it’s about saving money and staying compliant. Whether you’re an employee juggling multiple jobs, a pensioner with a state pension, or a business owner managing PAYE, a quick check can prevent overpaying tax or facing an unexpected bill. For instance, in 2025, Cillian Morvah, a London-based IT contractor, caught a D0 code error that taxed his entire income at 40%. By updating his Personal Tax Account, he corrected it to 1257L, recovering £800 in overpaid tax. Regular checks, especially after life changes, are your best defence.
A Final Word for Business Owners
If you’re running a business, don’t just focus on your own tax code—your employees’ codes matter too. A single mistake, like applying a BR code to an employee’s only job, can lead to overtaxing and unhappy staff. Use HMRC’s Basic PAYE Tools or your payroll software to stay on top of P9 notices. And if you’re self-employed with PAYE income, like a part-time job, double-check your code to avoid surprises when filing your self-assessment. In 2024, Lowri Tresize, a Liverpool-based florist, caught a 0T code error on her part-time retail income, saving £600 by contacting HMRC early.
This summary gives you the tools to take control of your tax code. By staying vigilant and using HMRC’s digital tools, you can ensure your tax is spot-on, leaving you more cash in your pocket and less stress in your life.
FAQs
Q1: What is the purpose of a tax code in the UK?
A1: A tax code determines how much tax is deducted from an individual’s income under the PAYE system, reflecting their personal allowance and any adjustments for additional income or benefits.
Q2: How often should someone check their tax code?
A2: Checking the tax code monthly or after significant life changes, such as starting a new job or receiving a pension, helps ensure accuracy and prevents over or underpayment of tax.
Q3: Can someone access their tax code without a Government Gateway ID?
A3: Yes, individuals can find their tax code on payslips, P45s, P60s, or HMRC’s PAYE Coding Notice, but a Government Gateway ID is needed for online access via the Personal Tax Account.
Q4: What happens if someone ignores an incorrect tax code?
A4: Ignoring an incorrect tax code can lead to overpaying tax, reducing take-home pay, or underpaying, resulting in a future tax bill with potential penalties.
Q5: How does a tax code affect tax refunds?
A5: An incorrect tax code may cause overpayment of tax, which can be refunded by HMRC after correcting the code, typically through adjustments in future payslips.
Q6: Can someone check their tax code if they’re self-employed?
A6: Self-employed individuals only have a tax code for PAYE income, like a part-time job; their business income is handled via self-assessment, but they can check any PAYE code online.
Q7: What does an emergency tax code look like?
A7: Emergency tax codes, such as 1257L W1, M1, or X, are temporary and applied when HMRC lacks full income details, often leading to temporary overtaxation.
Q8: How can someone know if they’re on the right tax code for multiple jobs?
A8: They should check their Personal Tax Account to ensure their personal allowance is correctly split across jobs, typically with 1257L for the main job and BR for others.
Q9: What should business owners do if an employee’s tax code seems wrong?
A9: Business owners should verify the code via HMRC’s P9 notice or payroll software and advise the employee to check their Personal Tax Account or contact HMRC.
Q10: Can someone appeal an HMRC decision about their tax code?
A10: Yes, they can contact HMRC to dispute the code, providing evidence like payslips, and if unresolved, they can appeal formally through HMRC’s complaints process.
Q11: How does moving to Scotland or Wales affect a tax code?
A11: Moving to Scotland or Wales changes the tax code prefix to S or C, reflecting regional tax rates, which must be updated in the Personal Tax Account.
Q12: What is the role of a P45 in checking a tax code?
A12: A P45, provided when leaving a job, shows the tax code used, helping individuals verify if it matches their current circumstances or needs updating.
Q13: Can someone check a tax code for a previous tax year?
A13: Yes, they can view past tax codes in their Personal Tax Account or check old payslips, P60s, or HMRC correspondence for historical records.
Q14: How does a company car affect a tax code?
A14: A company car reduces the personal allowance, lowering the tax code number (e.g., from 1257L to 1100L), increasing tax deductions to account for the benefit.
Q15: What is the significance of a tax code ending in X?
A15: A tax code ending in X, like 1257L X, indicates a week-to-week emergency code, often used temporarily and requiring prompt correction to avoid overtaxation.
Q16: Can someone check their tax code if they’re retired?
A16: Retirees can check their tax code on pension statements or through their Personal Tax Account, especially if receiving multiple pensions or state benefits.
Q17: How does a tax code impact self-assessment filings?
A17: For those with PAYE and self-employed income, the tax code only applies to PAYE income, while self-assessment calculates tax on business profits separately.
Q18: What should someone do if they can’t access their Personal Tax Account?
A18: They can call HMRC’s Income Tax helpline at 0300 200 3300 or check physical documents like payslips or P60s to confirm their tax code.
Q19: How long does it take to correct a tax code error?
A19: Correcting a tax code typically takes a few days to a week if updated online, or up to a month if HMRC requires additional evidence or manual processing.
Q20: Can a tax code affect National Insurance contributions?
A20: No, tax codes only govern income tax deductions; National Insurance contributions are calculated separately based on earnings and employment status.
About the Author
Mr. Maz Zaheer, FCA, AFA, MAAT, MBA, is the CEO and Chief Accountant of MTA and Total Tax Accountants—two of the UK’s leading tax advisory firms. With over 14 years of hands-on experience in UK taxation, Maz is a seasoned expert in advising individuals, SMEs, and corporations on complex tax matters. A Fellow Chartered Accountant and a prolific tax writer, he is widely respected for simplifying intricate tax concepts through his popular articles. His professional insights empower UK taxpayers to navigate their financial obligations with clarity and confidence.
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