Glossary · UK
What is Tax Code?
A code used by HMRC to tell your employer how much tax-free income you get each year.
Full Definition
A tax code is a string of numbers and letters used by HMRC and your employer to calculate the right amount of Income Tax to deduct via PAYE. The numbers usually represent your tax-free allowance divided by 10 — so 1257L means £12,570 personal allowance, and the L means standard Personal Allowance. Common codes include BR (basic rate on all income), 0T (no allowance), K (negative allowance — adjustment for benefits), and NT (no tax). Scottish tax codes start with an S (e.g. S1257L), Welsh codes with a C. Always check your tax code on your payslip or via your HMRC online account.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.