What is K Tax Code? UK Definition 2026/27
Quick Answer
Tax code meaning benefits exceed allowances - adds to taxable income.
Definition of K Tax Code
A K tax code is used when the value of your taxable benefits-in-kind and deductions from allowances exceeds your Personal Allowance. Instead of giving you tax-free income, it adds to your taxable income. For example, K497 means £4,970 is added to your taxable income. The maximum deduction is 50% of your pay each period.
K Tax Code — Key Facts for 2026/27
| Format | K followed by numbers |
| Meaning | Benefits exceed allowances |
| Effect | Adds to taxable income |
| Maximum deduction | 50% of pay |
How K Tax Code Works — Example
- 1Personal Allowance: £12,570
- 2Company car benefit: £15,000
- 3Medical insurance benefit: £2,000
- 4Total benefits: £17,000
- 5Net: -£4,430 (negative allowance)
- 6K tax code: K443
How K Tax Code Affects Your Tax
K codes significantly increase tax paid each month because benefits exceed your allowances. If you think a K code is wrong, contact HMRC immediately. Large company car benefits commonly trigger K codes.
Official HMRC Guidance on K Tax Code
For official guidance, refer to HMRC's documentation. Tax rules can change, so always verify current rates and thresholds on gov.uk.
HMRC: Tax codesFrequently Asked Questions about K Tax Code
Related Tax Terms
Tax Code
A code telling your employer how much tax-free pay you get.
Benefits in Kind
Non-cash perks from employers that are taxable, like company cars or private healthcare.
Personal Allowance
The amount you can earn tax-free each year - £12,570 for 2026/27.
PAYE
Pay As You Earn - the system for deducting income tax and NI from wages.
Accuracy Note
This information is for guidance only and is based on 2026/27 tax year rates. Tax rules are complex and your circumstances may differ. For personal advice, consult a qualified accountant or tax adviser.