UK Tax Codes Explained: How to Check, Change, and Fix Common Mistakes
If your payslip shows a jumble of letters and numbers—that’s your UK tax code. It tells your employer or pension provider how much Income Tax to deduct. Get it right and you pay the correct tax. Get it wrong and you could overpay or underpay. This guide breaks down how tax codes work, the most common codes (and what they mean), why they change, and how to correct mistakes fast.
What is a UK tax code?
A tax code is a shorthand HMRC uses to show how much tax-free income (your Personal Allowance) you’re entitled to and whether any adjustments apply (e.g., benefits-in-kind, underpaid tax, or Marriage Allowance). Employers and pension providers use it under PAYE to calculate tax on your wages or pension.
Quick tip: Your tax code can appear on your payslip, P45, P60, or HMRC P2 coding notice and in your HMRC Personal Tax Account (Government Gateway).
How tax codes are built
Your tax code is made up of numbers and letters — the numbers usually represent your tax-free allowance divided by 10 (for example, a code like 1257L historically indicated a £12,570 allowance), while the letters show your specific tax situation or adjustment.
Common letters & what they mean
Each tax code ends with a letter that explains your tax situation or any special adjustments made by HMRC. Understanding these letters helps you check whether your code is correct and ensures you’re paying the right amount of tax. The most commonly use letters are as follows:
- L – You’re entitled to the standard Personal Allowance.
- M – You’ve received Marriage Allowance from your spouse/civil partner.
- N – You’ve transferred Marriage Allowance to your spouse/civil partner.
- T – HMRC needs to review your code (other adjustments apply).
- BR – All income from this job/pension is taxed at the basic rate (no allowance used here).
- D0 / D1 – All income at higher/additional rate at this source (no allowance here).
- 0T – No Personal Allowance is being used (often temporary when HMRC lacks info).
- K – Negative allowances (you owe tax on benefits/underpayments; extra tax is collected via PAYE).
- W1 / M1 (week 1 / month 1) – Emergency tax, calculates each payday in isolation instead of “cumulative” from 6 April.
Note: Exact numeric allowances and common default codes can change each tax year. Always check the current year’s notice from HMRC.
Why your tax code changes
Your tax code isn’t fixed — it can change whenever your personal or financial circumstances change. HMRC regularly updates tax codes to make sure you’re paying the right amount of Income Tax based on your income, benefits, and allowances. Understanding why it changes can help you spot errors early and avoid unexpected tax bills or overpayments. Examples includes:
- You start or leave a job (P45 not provided or used).
- You begin receiving a pension.
- You claim or stop Marriage Allowance.
- You get or change benefits-in-kind (such as a company car or medical insurance).
- HMRC is collecting underpaid tax from a previous year.
- You have multiple jobs or pensions and your allowance needs to be split.
- You give HMRC updated details (for example, new salary, benefits, or additional income).
Common tax code problems (and simple fixes)
| Tax Code Problem | Explanation & Fix |
|---|---|
| Emergency code (W1/M1 or 0T) | Often happens when your employer hasn’t received your P45 or HMRC hasn’t processed your details. Fix: Give your new employer your P45 as soon as possible, or complete a starter checklist. Check your Personal Tax Account and ask HMRC to update your tax code. |
| BR/D0/D1 used incorrectly | These codes mean all your pay is taxed at one rate with no Personal Allowance. This can be correct for a second job, but wrong for your main job. Fix: Ask HMRC to move your Personal Allowance to the correct job or pension. |
| K code too high | This means HMRC is collecting underpaid tax or benefits-in-kind through your tax code. Fix: Check your P2 coding notice for a breakdown. If the figures are wrong, contact HMRC with evidence (e.g., benefits that have ended). |
| Wrong benefits-in-kind | If your company car, medical insurance, or other benefits have changed, your code may be incorrect. Fix: Ask your employer to update the P11D and notify HMRC; request a revised tax code. |
| Marriage Allowance missing | If you’re eligible, Marriage Allowance should adjust your code (M or N). Fix: Apply or update your claim on GOV.UK and HMRC will update your code automatically. |
How to check and change your tax code
Checking and correcting your UK tax code is easier than most people think — and doing it could save you from paying too much or too little tax. Here are the simple steps you can take to make sure your tax code is accurate and up to date:
- Log in to your HMRC Personal Tax Account on GOV.UK
to view your current tax code and see how it’s been calculated, including any adjustments made by HMRC. - Compare HMRC’s figures with your real circumstances, such as your benefits-in-kind, work expenses, pensions, or multiple jobs, to make sure everything matches.
- If your tax code looks wrong, contact HMRC directly (by phone or secure message) and also inform your employer’s payroll department so they can apply any updates.
- Keep copies of important documents such as your P45, P60, P11D, benefit statements, and any HMRC coding notices (P2) for your records — these will help if you ever need to query or prove a correction.
Multiple Jobs or Pensions? Here’s What to Do
If you have more than one job or receive multiple pensions, it’s important to make sure your Personal Allowance is allocated correctly. HMRC can split your allowance between different sources
Will My Tax Code Fix Past Overpayments or Underpayments?
If your tax code has recently changed, you may be wondering whether it will also correct any past errors. The short answer is — it depends on your situation. Here’s how it works:
An updated tax code only fixes your tax going forward.
HMRC applies the new code from the date it’s issued, so future payslips or pension payments should now be taxed correctly.
HMRC may use your new code to collect past underpayments.
UK Tax Code FAQs
What is the most common UK tax code?
In recent years, a code ending in “L” has been common for people on the standard Personal Allowance. The exact number can change each tax year depending on government adjustments.
Why am I on an emergency tax code?
You may be on an emergency tax code if HMRC or your employer does not yet have your full details (for example, a missing P45). Once your records are updated, your code usually changes to a normal cumulative basis and any overpaid tax may be refunded.
Can student loan or National Insurance affect my tax code?
Student Loan and National Insurance contributions are separate from your tax code. Your tax code only determines how much Income Tax is deducted from your earnings.
What is a K code and should I worry?
A K code means HMRC is collecting tax on benefits-in-kind or previous underpayments through PAYE. It can be correct, but you should always check that the figures match your actual situation to avoid overpaying.
How do I move my allowance to the right job?
Contact HMRC and ask for your Personal Allowance to be allocated to your main job or pension. HMRC will then issue updated tax codes to your employers or pension providers.
Need Help Fixing Your Tax Code Quickly?
A wrong tax code can quietly cost you hundreds of pounds every year — and in many cases, people only discover the problem months later when they’ve already overpaid or underpaid tax.
At Odiri Tax Consultants, we specialise in identifying and correcting tax code errors quickly and efficiently.
Your tax code determines how much Income Tax you pay through PAYE, and even a small mistake can make a big difference to your take-home pay. Our experienced tax advisers will review your code, check the figures HMRC is using, and contact them directly on your behalf to make sure your records are corrected accurately and without delay.
Whether your tax code is wrong because of HMRC miscalculations, multiple jobs, changes in benefits, or unreported allowances, we’ll help you get it sorted fast — ensuring you only pay the right amount of tax, no more and no less.
Our Tax Code Services Include:
Rapid PAYE tax code check and correction
Full review of benefits-in-kind and tax-free allowances
Support for individuals with multiple jobs or pensions
Refund checks for overpaid tax
Direct communication with HMRC to resolve errors
Our goal is simple — to help you keep more of what you earn, avoid unnecessary tax bills, and stay compliant with HMRC.
If you suspect your tax code is wrong or you just want peace of mind, get in touch with Odiri Tax Consultants today. We’ll take the stress out of dealing with HMRC and make sure your tax code is fixed the right way, the first time.
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