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Are you on the correct tax code?

  • 1 min read
  • Last updated 10 May 2022

The tax code is just a series of numbers and letters that tells HMRC how much tax you should be paying.

Your situation

Outlined number oneImage of an arrow
Tax code
Annual salary

Tax and profit

Outlined number two
  • PAYE earnings
    £49,000

How your tax code is calculated

There are three main components that determine your tax code:

  • What you earn
  • Allowances you’re claiming
  • Your tax-free allowances

What does the number mean?

The numbers in your tax code 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’re not sure what basic rate, higher rate, etc. means, read more about the UK income tax rates and tax bands here.

When should I contact the HMRC about my tax code?

  • When you see BR, D0, or D1. It means that you’re getting zero Personal Allowance. If you’re on any of these codes and it’s not from a second job, contact HMRC.
  • If you’ve just moved jobs. Make sure that you’re not on an emergency code.

What tax code should I have?

The most common one for 2022/23 will be 1250L:

  • 1250 because the Personal Allowance in 2022/23 is £12,570
  • L for the standard Personal Allowance.

If you take 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 can sort it out for you.

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