Answers · UK 2025/26
What does tax code K mean?
A K tax code means you have untaxed income or benefits that exceed your Personal Allowance, so HMRC adds the difference to your taxable pay instead of giving an allowance. For example K500 adds £5,000 to your annual taxable salary. K codes are common with company cars or unpaid tax owed.
Full answer
Most UK tax codes start with a number followed by a suffix letter (e.g. 1257L) — the number × 10 is your tax-free allowance. A K code is the opposite: the number × 10 is added to your taxable pay. HMRC uses K codes when deductions exceed your Personal Allowance, typically because of: (a) a large benefit-in-kind such as a company car or private medical; (b) State Pension or other untaxed income exceeding the PA; (c) tax underpaid in earlier years being collected via PAYE. Example: code K500 with £40,000 salary means HMRC treats your taxable pay as £45,000. Safeguard: PAYE cannot deduct more than 50% of your pay in any pay period when a K code is in operation. Check your code at gov.uk/personal-tax-account and contact HMRC if you think it is wrong — they may issue a tax refund if the underlying benefit has stopped.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.