UK Tax Codes Explained 2026/27
Your tax code tells your employer how much Income Tax to deduct. Understanding it helps ensure you pay the right amount.
Standard Tax Code 2026/27
1257L is the most common tax code.
- 1257 = Personal Allowance of £12,570 (drop the last digit)
- L = Standard allowances apply
This means you can earn £12,570 tax-free before paying 20% on the rest.
Tax Code Letters
| Letter | Meaning |
|---|---|
| L | Standard Personal Allowance |
| M | Marriage Allowance received |
| N | Marriage Allowance transferred |
| T | Items requiring HMRC review |
| 0T | No Personal Allowance |
| BR | All income taxed at basic rate (20%) |
| D0 | All income taxed at higher rate (40%) |
| D1 | All income taxed at additional rate (45%) |
| K | Deductions exceed allowances |
| NT | No tax to be deducted |
| S | Scottish rates apply |
| C | Welsh rates apply |
Common Tax Codes
1257L
Standard code for most employees. £12,570 tax-free allowance.
BR
Second job or pension where allowance is used elsewhere. All income taxed at 20%.
0T
No Personal Allowance. Used when:
- P45 not provided
- Income over £125,140
K Codes
When taxable benefits exceed your allowance, HMRC uses K codes to collect extra tax.
Example: K497
- Means £4,970 must be added to your taxable income
- Usually due to company car, private medical, etc.
NT
No tax deducted. Rare - used for specific exempt income.
Scottish Tax Codes
Scotland has different Income Tax rates. Scottish codes start with S:
| Code | Meaning |
|---|---|
| S1257L | Scottish rates, standard allowance |
| SBR | Scottish basic rate on all income |
| SD0 | Scottish higher rate on all income |
Welsh Tax Codes
Wales uses the same rates as England but codes start with C:
- C1257L - Welsh resident, standard allowance
Checking Your Tax Code
Your tax code appears on:
- Payslip
- P45 (when leaving a job)
- P60 (annual summary)
- HMRC online account
Is Your Code Correct?
Check if you:
- Have the right Personal Allowance (£12,570 standard)
- Only have allowances on ONE job
- Have accurate benefit information
How to Change It
- Log in to your HMRC online account
- Check your income sources
- Update any incorrect information
- HMRC will issue a new tax code
Emergency Tax Codes
When starting a new job without P45:
- 1257L W1/M1 - Emergency tax code
- Tax calculated on current period only
- Usually corrected once HMRC updates records
Related Calculators
- Income Tax Calculator - Calculate your tax
- Take Home Pay Calculator - Full pay breakdown