What Is a UK Tax Code?
A tax code is a combination of numbers and letters that HMRC sends to your employer or pension provider, telling them how much income tax to deduct from your pay each month under the PAYE (Pay As You Earn) system. The code is unique to you and changes when your circumstances change — for example if you start receiving a company benefit, take a second job, or owe underpaid tax from a previous year.
Your tax code appears on your payslip, P60, and P45. HMRC also shows your current code in your Personal Tax Account at gov.uk/personal-tax-account.
1257L: The Most Common Tax Code in 2026/27
Around 85% of UK taxpayers have code 1257L. It applies to most employees with one job, no taxable benefits, no outstanding underpaid tax, and income under £100,000.
How to read it: the number × 10 = your annual tax-free allowance. So 1257 × 10 = £12,570 — the standard Personal Allowance for 2026/27. The letter L confirms you receive the full standard allowance.
How 1257L works on a £35,000 salary
The code is applied cumulatively — meaning PAYE accounts for your total earnings and tax paid since 6 April each year, automatically adjusting each month's deduction if you were over or under-taxed previously.
What the Letters Mean
| Letter | Meaning | Common example |
|---|---|---|
| L | Full standard Personal Allowance | Most employees — 1257L |
| M | Marriage Allowance received (+10% of PA) | 1382M — received partner's allowance |
| N | Marriage Allowance transferred (−10% of PA) | 1131N — transferred to partner |
| T | Other calculations required (complex) | HMRC needs to review your code |
| S | Scottish taxpayer rates | S1257L — lives in Scotland |
| C | Welsh taxpayer rates (Cymraeg) | C1257L — lives in Wales |
| BR | Basic Rate — all taxed at 20%, no allowance | Second job, pension income |
| D0 | Higher Rate — all taxed at 40%, no allowance | Second job (high earner) |
| D1 | Additional Rate — all taxed at 45%, no allowance | Additional job (very high earner) |
| K | Negative allowance — taxable benefits exceed PA | K475 adds £4,750 to taxable income |
| 0T | Zero personal allowance — income over £125,140 | Very high earners (PA fully tapered) |
| NT | No tax deducted | Non-taxable income sources |
Emergency Tax Codes: W1, M1 and X
Emergency tax codes are temporary codes issued when HMRC lacks complete information about your employment — most commonly when you start a new job and your employer doesn't yet have your P45 from your previous employer.
For 2026/27, the emergency codes are 1257L W1, 1257L M1, and 1257L X.
The critical difference: instead of calculating tax cumulatively across the whole year, emergency codes treat each pay period in isolation:
- W1 = Week 1 basis — tax calculated as if this is always week 1 of the tax year
- M1 = Month 1 basis — same but for monthly-paid employees
- X = Non-standard pay period (e.g. irregular or variable)
Why emergency codes often mean overpaying tax
If you start a job in December (month 9 of the tax year) having earned nothing since April, a cumulative code would recognise you've used only 0 months of your £12,570 allowance and apply 9 months' worth at once — leaving you with almost no tax to pay. An emergency M1 code just gives you 1/12 of the allowance (£1,047) — so you pay tax on the rest. You'll get a refund once your code is corrected.
Quick Reference: What to Look for on Your Payslip
| You see on payslip | What it means | Action needed? |
|---|---|---|
| 1257L | Standard — full allowance, main job | ✓ All fine |
| 1257L W1/M1 | Emergency — new job / missing P45 | ⚠ Resolve within 2 months |
| 1382M | Receiving Marriage Allowance from partner | ✓ Fine if your partner transferred |
| 1131N | Transferred Marriage Allowance to partner | ✓ Fine if you transferred |
| BR | Basic rate on all income — no allowance | ✓ Normal for 2nd job |
| 0T | No personal allowance — income over £125,140 | ✓ Correct if PA tapered away |
| K [number] | Benefits exceed allowance — income inflated | ⚠ Check P11D matches |
| D0 / D1 | Higher/additional rate on all income — no allowance | ✓ Normal for high-earning 2nd job |
Second Job Tax Codes
If you have two jobs, your Personal Allowance is applied to your main job (usually the one you've been in longest, or the higher-paying one). Your second job will receive one of these codes:
- BR — if your main job uses your basic-rate band: all second job income taxed at 20%
- D0 — if your main job's income already fills the basic-rate band: second job at 40%
- D1 — if both jobs together push you into the additional rate band: second job at 45%
This is correct and intentional — it ensures the right total tax is paid across both jobs. However, if your combined income from both jobs is less than £12,570, you can contact HMRC to split the Personal Allowance between the two employers.
Scotland and Wales Tax Codes
Scottish taxpayers have an S prefix (e.g. S1257L) and pay Scottish income tax rates set by the Scottish Parliament — these differ significantly from England/Wales/Northern Ireland rates. Welsh taxpayers have a C prefix (e.g. C1257L) and currently pay the same rates as England. Your prefix is determined by where you live, not where you work.
How to Check and Fix a Wrong Tax Code
Signs your code may be wrong:
- You're on W1/M1 for more than 2–3 months in a new job
- Your taxable benefits (e.g. company car) have changed but your code hasn't updated
- You changed employers but your code hasn't reset
- You receive an unexpected P800 showing a large underpayment or overpayment
- You're on BR (basic rate) for your only job
To fix it: log in to your HMRC Personal Tax Account, review your code breakdown, and raise a query online. Or call HMRC on 0300 200 3300 (Mon–Fri, 8am–6pm). Your employer cannot change your tax code — only HMRC can.
Claiming Back Overpaid Tax (Up to 4 Years)
If you've been on a wrong tax code, HMRC typically adjusts it automatically and issues any refund through your payslip or a P800 cheque. If you haven't received a refund and believe you've overpaid, you can claim back up to four complete tax years. In 2026/27, that means you can claim back to 2022/23.
Claims can be made through your Personal Tax Account online, or by writing to HMRC. You'll need your P60s and payslips for the relevant years as evidence.
Sources
GOV.UK: Tax codes — what your tax code means · HMRC: Emergency tax codes · HMRC: Understanding employee tax codes · MakePayslip UK Tax Codes Guide 2026/27 · Tax Rebate Services: Tax Code 2026/27. For guidance only — not financial advice.