Are you on the correct tax code?

A tax code is simply a series of numbers and letters that tells HMRC the amount of tax you should be paying – it’s not as daunting as it sounds. 

Pop your tax code and annual salary into our tax calculator for a quick breakdown of your taxes.

What does the number mean?

The numbers in your tax code probably look like a foreign language to most people, we get it! But funny enough, they simply tell your employer or pension provider how much tax-free income you are entitled to in that tax year.

What does the letter at the end mean?

If you haven’t got a clue what terms such as basic rate, higher rate, etc. mean, we’ve broken it all down for you (you’re more than welcome!) Read more about the UK income tax rates and tax bands here.

When should I contact the HMRC about my tax code?

There are a few reasons why you may need or want to get in touch with HMRC when it comes to your tax code. I.e:

• If you see BR, D0, or D1, it means that you’re getting zero tax-free personal allowance. If you’re on any of these codes and it’s not from a second job, contact HMRC
• If you’ve just started a new job – you may want to contact HMRC just to ensure that you’re not on an emergency tax code
• If you’ve cleverly beaten HMRC to it and suspect you’re paying too much or too little tax 

You can contact HMRC by giving them a ring on 0300 200 3310 or you can create a personal tax account to access their online services – whatever works best for you! However, if you do decide to give HMRC a call, it will help to have your national insurance number to hand.

What tax code should I have?

The most common tax code for 2024/25 is 1257L:

• 1257 because the Personal Allowance in 2024/25 is £12,570
• L for the standard Personal Allowance

If you take up a second job, then you don’t get a personal allowance for this one, so you need to make sure that the job that pays you the most is the one with ‘L’ and not ‘BR’.

What if my tax code is wrong?

You should contact HMRC as soon as possible – they will be able to sort out this problem by simply issuing your employer or pension provider a revised tax code. 

What happens if I pay too much or not enough tax?

If you’ve overpaid tax, this will be repaid either through your next pay or at the end of the tax year when you receive your P8100. If you’ve paid too little tax this will be recovered through your income or you will receive a simple assessment tax bill.