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Are you on the correct tax code?

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

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?

Letter Explanation
L You’re getting the standard tax-free Personal Allowance. This tax code is the most common one
M 10% of your partner’s personal allowance goes to you
N 10% of your personal allowance goes to your spouse
S You’re using the Scottish rate of income tax
T Other: your tax code includes other calculations
Y You were born before 6 April 1938, and get a higher personal allowance
0T Your Personal Allowance has been used up or you’ve started a new job
BR You’re getting the basic rate
D0 You’re getting the higher rate
D1 You’re getting the additional rate
NT You’re not paying tax on this income
K You have income that isn’t being taxed another way and it’s worth more than your tax-free allowance

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 2020/21 will be 1250L:

  • 1250 because the Personal Allowance in 2020/21 is £12,500
  • 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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