HMRC Tax Codes
What if I've got a different tax code?
There are lots of different tax codes you could be given, and lots of reasons behind them. The number part of your code might be different, for instance, if you've got more than one job or if you and your spouse use the Marriage Allowance rules to transfer a portion of your Personal Allowances between you. As for the letters, here's what they actually mean:
The L Code: You qualify for the normal tax-free personal allowance.
The M Code: Your partner has transferred up to 10% of their personal allowance to you.
The N Code: You've transferred up to 10% of your personal allowance to your spouse.
The S Code: You're eligible for the Scottish rate of Income Tax.
The Y Code: You were born before 6 April 1938. This means your Personal Allowance is higher.
The T Code: Your Personal Allowance has some other calculations factored into it.
The 0T Code: This either means you've used up your Personal Allowance, you don't have a P45 or you've got a new employer and they don't have the information they need to work out your proper tax code.
The R Code: Your income for this job (or pension) is taxed at the basic rate from the very first penny. This can happen if you've got another job and your allowance is attached to that one, for example.
The D0 Code: You're being taxed at the higher rate on all the money from this job or pension.
The D1 Code: All of the money from this job or pension is being taxed at the additional rate.
The NT Code: You don't pay tax on this income at all.
Those letters cover most of the situations you might encounter, but there are a few others. The K code, for example, means your circumstances have brought your Personal Allowance down so much that it's actually below £0. That's a nasty situation to finds yourself in – it's like owing tax on cash you never even earned!
Sometimes, HMRC will change your code to account for the work expenses you've claimed tax rebates for in the past. Basically, they just alter your code so that you won't be charged too much tax in the future. The trouble with this is that the taxman tends to assume that your expenses won't ever change year on year. As anyone who travels for work will tell you, that's just not the case. Getting stuck on the wrong tax code can be a serious hassle, so it's really important to stay on top of yours. If it changes and you don't know why, send up a distress flare to RIFT. We'll check the code you're on and get it fixed if it's wrong.
Start for free >