Pillar Guide / Updated June 2026

UK Tax Code Letters Explained: L, BR, D0, K, M, N, T, 0T and More 2026/27

Your tax code is the short string of numbers and letters that tells your employer how much tax-free pay to give you and which rate to tax the rest at. Get it wrong and you could overpay for months -- or be hit with an unexpected bill. This 2026/27 guide decodes every common UK tax code letter and suffix, from the standard 1257L to BR, D0, D1, K, M, N, NT, 0T, T and the W1/M1 emergency codes, with worked examples and how to fix a wrong code.

Last updated: 10 June 2026Last reviewed: 10 June 2026How we verify

Key tax code facts -- 2026/27

Standard code: 1257L = GBP 12,570 tax-free allowance
BR: 20% on all income, no allowance
D0 / D1: all income at 40% / 45%
K codes: add income instead of allowance (50% cap)
M / N: Marriage Allowance GBP 1,260 received / given
S prefix: Scottish rates (19% to 48%)

How a Tax Code Is Built

A UK tax code normally has two parts: a number and a letter. The number is your tax-free allowance for the year divided by ten -- so 1257 means GBP 12,570 of tax-free income. The letter describes your situation and how the code should be operated. A prefix letter S means Scottish rates apply and C means Welsh rates (though Welsh rates currently match rUK).

Most codes are operated on a cumulative basis, meaning each payday looks at your total pay and allowance for the year so far and corrects any over- or under-payment automatically. A suffix such as W1 or M1 switches this off and operates the code period by period. Understanding which letter you have tells you exactly how your income is being taxed.

The Standard L Code

The L code means you get the standard personal allowance with no special adjustments. For 2026/27 the personal allowance is GBP 12,570, giving the code 1257L. Once your pay exceeds the allowance, the rUK bands apply: 20% on taxable income up to GBP 37,700, 40% to GBP 125,140, and 45% above. The allowance itself tapers away once income exceeds GBP 100,000 -- losing GBP 1 of allowance for every GBP 2 of income, and disappearing entirely at GBP 125,140, which creates an effective 60% marginal rate in that band.

If your allowance is reduced or increased, the number changes but the L stays. For example, a small taxable benefit might leave you on 1200L, giving GBP 12,000 of tax-free pay.

BR, D0 and D1 Codes

These three codes apply a single flat rate to all income from a source, with no allowance:

BR (Basic Rate): all income taxed at 20%. Typically used on a second job or pension where your allowance is used by your main job.
D0: all income taxed at 40% (higher rate), used where your main income already fills the basic band.
D1: all income taxed at 45% (additional rate), used where your main income exceeds GBP 125,140.

These codes are correct when your allowance really is fully used elsewhere. But if you are on BR for your only job, you are losing GBP 12,570 of tax-free pay and should contact HMRC straight away.

K Codes (Negative Allowance)

A K code works in reverse. Instead of subtracting allowance from your pay, it adds notional income. This arises when taxable deductions -- such as the benefit-in-kind value of a company car, or tax owed from a previous year being collected through your code -- exceed your personal allowance. A code of K500 adds GBP 5,000 to your taxable income for the year.

To stop a K code taking too much in any one period, the law caps the tax deducted under a K code at 50% of your pay for that period. Any tax that cannot be collected because of the cap is carried forward.

M and N (Marriage Allowance)

The Marriage Allowance lets a non-taxpaying spouse or civil partner transfer GBP 1,260 of their personal allowance to a basic-rate partner. The codes reflect both sides of the transfer:

N code: you have given away GBP 1,260 of allowance -- your code drops, for example to 1131N.
M code: you have received GBP 1,260 -- your code rises, for example to 1383M.

The transfer is worth up to GBP 252 a year in tax (20% of GBP 1,260) and is only beneficial where the giver earns below GBP 12,570 and the receiver is a basic-rate taxpayer.

0T, NT and T Codes

The 0T code gives no allowance but applies the normal 20%, 40% and 45% bands as your earnings increase -- common for a new starter with no P45 or once allowance is fully used. NT means no tax is taken at all, used in narrow cases such as certain non-residents. The T code flags that HMRC has "other items" to review in your allowance, so the code is not auto-updated and should be checked each year to make sure it is still right.

Emergency W1 and M1 Codes

Emergency codes are written as 1257L W1 (weekly pay) or 1257L M1 (monthly pay). They give the standard allowance but only for the current period and ignore your earnings earlier in the year. They are applied when an employer cannot see your year-to-date position -- usually because you started without a P45. While on an emergency code you can over- or under-pay; once HMRC issues a cumulative code any overpayment is refunded automatically through your pay.

Worked Examples

Example 1 -- wrong BR code on a sole job (GBP 24,000 salary).

On BR, all GBP 24,000 is taxed at 20% = GBP 4,800 income tax.
On the correct 1257L, only GBP 24,000 - GBP 12,570 = GBP 11,430 is taxed at 20% = GBP 2,286.
Overpayment if left on BR: GBP 2,514 a year -- which HMRC refunds once the code is fixed.

Example 2 -- a K code from a company car (code K200).

The car benefit value exceeds the GBP 12,570 allowance by GBP 2,000.
K200 adds GBP 2,000 to taxable income for the year.
On top of a GBP 40,000 salary, taxable income becomes GBP 42,000.
Extra tax at 20% on the added GBP 2,000 = GBP 400 over the year.

Always reconcile your code against your HMRC notice. Use a take-home pay calculator to test what your net pay should be under the code you have been given.

Frequently Asked Questions

What does the standard tax code 1257L mean?

The 1257L code is the most common UK tax code for the 2026/27 year. The numbers 1257 represent your tax-free personal allowance divided by ten -- so 1257 means GBP 12,570 of tax-free income. The letter L simply confirms you are entitled to the standard personal allowance with no special adjustments. With a 1257L cumulative code your employer spreads GBP 12,570 of tax-free pay evenly across the year, so a monthly-paid employee gets roughly GBP 1,048 tax free each month before income tax applies at 20%, 40% or 45% on the rest.

What does a BR tax code mean and when is it used?

BR stands for "Basic Rate" and means all income from that employment or pension is taxed at 20% with no tax-free allowance applied. It is most commonly used for a second job or a pension, on the assumption that your personal allowance is already being used in full by your main job. If you earn GBP 12,000 in a second job on a BR code, you pay 20% on the whole GBP 12,000 even though you might have had spare allowance -- in which case you should ask HMRC to split your allowance between the two jobs to avoid overpaying.

What is the difference between D0 and D1 tax codes?

D0 means all income from that source is taxed at the higher rate of 40% with no personal allowance, while D1 means all income is taxed at the additional rate of 45%. These codes are used for a second job or pension where your main income already uses your allowance and pushes that source entirely into the higher or additional band. For example, a high earner with a main salary above GBP 125,140 might have a second income on a D1 code so that the whole of it is taxed at 45%, matching their top marginal rate.

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What does a K tax code mean and why might I have one?

A K code is the opposite of a normal code: instead of giving you tax-free allowance, it adds notional income to your taxable pay. This happens when deductions -- such as the taxable value of a company car, untaxed income, or repaying tax owed from an earlier year -- exceed your personal allowance. The number after K, multiplied by ten, is the extra amount added to your taxable income. A safeguard limits the tax taken under a K code to 50% of your pay in any period, so it cannot wipe out your whole salary at once.

What do the M and N tax code suffixes mean?

The M and N letters relate to the Marriage Allowance. The N code (for example 1131N) means you have transferred 10% of your personal allowance -- GBP 1,260 in 2026/27 -- to your spouse or civil partner, reducing your own allowance. The M code (for example 1383M) means you have received that GBP 1,260 transfer from your partner, increasing your allowance. Marriage Allowance is only worth claiming where one partner earns below the GBP 12,570 personal allowance and the other is a basic-rate taxpayer.

What does an emergency tax code like W1 or M1 mean?

W1 (week 1) and M1 (month 1) are non-cumulative emergency codes, written as 1257L W1 or 1257L M1. They give you the standard allowance but only for the current period, ignoring what you have earned and paid earlier in the year. They are typically applied when you start a job without a P45, so the employer cannot see your year-to-date position. Because they ignore prior pay you can overpay or underpay until HMRC issues a cumulative code, after which any overpaid tax is refunded automatically through your pay.

What do the 0T, NT and T tax codes mean?

The 0T code gives no personal allowance and taxes income at the normal 20%, 40% and 45% bands as your earnings rise -- it is often used when a new starter provides no details and has no P45, or once the allowance is fully used. NT means No Tax is deducted at all, used in limited situations such as certain non-residents or where tax is collected another way. The T code means there are "other items" HMRC needs to review in your allowance calculation, so the code is not automatically updated and may need checking each year.

How do I correct a wrong tax code?

First check your code against your latest HMRC tax code notice and your Personal Tax Account at gov.uk. If it looks wrong -- for example you are on BR or 0T but this is your only job, or a benefit you no longer receive is still in your code -- contact HMRC to update it. HMRC will issue a revised code to your employer, and because most codes are cumulative, any tax you overpaid earlier in the year is repaid through your next payslip. If you have overpaid in a previous tax year, HMRC issues a P800 calculation and a refund.

What does the S or C prefix on a tax code mean?

An S prefix (for example S1257L) means you are a Scottish taxpayer and your income is taxed using the Scottish bands: 19% starter rate, 20% basic rate, 21% intermediate rate, 42% higher rate, 45% advanced rate and 48% top rate for 2026/27, rather than the rUK 20/40/45% bands. A C prefix means Welsh rates apply, though the Welsh rates currently mirror the rUK bands so the tax due is the same. The prefix is based on where you live, not where you work.

Where do I find my tax code and how often can it change?

Your current tax code is shown on your payslip, your P45 or P60, and in the "Check your Income Tax" section of your Personal Tax Account on gov.uk. HMRC can update your code at any time during the year -- for example after a change to your benefits, a new job, a Marriage Allowance claim, or a P800 review -- and your employer must apply the new code from the next available payday. It is worth checking your code whenever your circumstances change rather than waiting for the annual coding notice.

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About the author

Emma Clarke

UK Tax Writer

Emma Clarke has been writing about UK personal tax since 2018, with a particular focus on Self Assessment, PAYE coding and the practical mechanics of how HMRC actually applies the rules to ordinary salaries. Her work concentrates on translating the dense language of HMRC manuals and Finance Act schedules into worked examples that show, pound by pound, how income tax and National Insurance reduce a gross salary to the figure that lands in a UK bank account. Emma covers the full PAYE lifecycle: tax codes (1257L, BR, K codes, emergency codes), the Marriage Allowance, the High Income Child Benefit Charge, salary sacrifice arrangements and their effect on pensionable pay, the Apprenticeship Levy, and the differences between the rUK and Scottish income-tax regimes. She is particularly interested in the edge cases that catch PAYE employees out — the £100,000 personal-allowance taper, the 60% effective marginal rate it creates, and the interaction between student-loan plans and pension contributions. Every figure in Emma's articles is verified against the current HMRC rates pages and worked through a Self Assessment calculation by hand before publication. She writes to CalcHub's editorial standards: primary-source citations, plain English, no promotional language, and clear "this is general information, not financial advice" disclaimers where appropriate.

Personal-finance writer since 2018
UK tax specialism — PAYE, Self Assessment, National Insurance
Writes to CalcHub editorial standards (primary-source citation, annual review)

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Last updated: 10 June 2026How we verify

Disclaimer: This guide reflects UK tax code rules for 2026/27 as of June 2026. It is general information, not financial advice. Your own code depends on your circumstances. Check your code in your Personal Tax Account and see gov.uk tax codes for HMRC guidance.