How to read your code
- Multiply the number by 10. 1257 means £12,570 of tax free income.
- Read the letter. L is the standard allowance, M and N relate to the marriage allowance, and BR, D0 or D1 tax all income at a set rate.
- Watch for K codes. A K code adds tax because deductions exceed your allowance, often due to benefits or untaxed income.
- Spot emergency codes. W1 or M1 tax each period in isolation until HMRC issues the right code.
How to check and correct it
Check your code in your Personal Tax Account or the HMRC app, where you can see how it was worked out. If it looks wrong, for example because a benefit has ended or you changed jobs, HMRC can reissue it, and you can reclaim overpaid tax or settle any shortfall.
What 1257L means, and why it is almost everyone
The number is your tax free allowance divided by 10. 1257L means £12,570 of tax free income for the year, spread evenly across your pay periods.
The personal allowance has been £12,570 since 6 April 2021 and is frozen at that level until 5 April 2031, so 1257L will remain the standard code for some time. HMRC confirmed 1257L as the code to use for 2026/27.
Because it is spread evenly, a monthly employee gets £1,047.50 of tax free pay a month and a weekly employee £241.73 a week.
The letters, and what each one is telling you
- L You get the standard personal allowance.
- BR Every penny from this job or pension is taxed at basic rate, with no allowance. Normal for a second job.
- D0 Everything taxed at higher rate. D1 Everything at additional rate.
- NT No tax deducted at all.
- 0T No allowance, usually because it is used elsewhere or your new employer has no details.
- K The one to look at twice. It means untaxed income or a benefit exceeds your allowance, so instead of deducting an allowance the code adds notional income. Common causes are a company car, medical insurance, the state pension, or tax owed from an earlier year.
- M and N Marriage Allowance received or given away.
- S Scottish rates. C Welsh rates.
One protection worth knowing on a K code: there is a 50% overriding limit, so no more than half of any single payment can be taken in tax. It stops a K code swallowing an entire pay packet, though the underlying amount still has to be collected eventually.
Emergency codes, and why your first payslip looks wrong
A code ending W1, M1 or X is being operated on a non cumulative basis. Your tax is worked out on that week or month alone, ignoring everything earned earlier in the year. It may show as NONCUM on a payslip.
The emergency code for 2026/27 is 1257L, operated week 1 or month 1. It usually appears because you started a new job without a P45, started receiving company benefits, or began drawing a pension.
It is usually temporary. Give your employer your P45 or complete a starter checklist and HMRC will normally correct it, though it can take up to 35 days from when you start. If you are still on an emergency code after that, contact HMRC rather than waiting.
What the bands actually are for 2026/27
For England, Wales and Northern Ireland: nothing on the first £12,570, 20% from £12,571 to £50,270, 40% from £50,271 to £125,140, and 45% above that. Scotland has its own rates and bands.
There is a trap between £100,000 and £125,140. The personal allowance is withdrawn by £1 for every £2 of income above £100,000, which produces an effective marginal rate of 60% in that band. If your code changes sharply around a bonus, this is usually why.
Checking and correcting it
Look at your Personal Tax Account or the HMRC app, your payslip, or the P2 coding notice HMRC sends when it changes something. The coding notice is worth reading rather than filing, because it shows the assumptions HMRC has made about your benefits and other income.
Tell HMRC when something changes: a company car returned, a second job ended, a benefit stopped. They cannot adjust what they do not know about. If you have overpaid or underpaid, it is settled either through a P800 calculation after the year end or by adjusting a future code.
Why it is worth ten minutes
A wrong code is not a small problem in either direction. Too much allowance and you build a debt that arrives as an underpayment later. Too little and you are lending HMRC money interest free all year. Check it in April when codes change, and again whenever your circumstances do.
Think your code is costing you?
A wrong code can quietly take too much every payday. TaxTune checks your code, gets HMRC to correct it, and reclaims any tax you have overpaid.
Let us make sure your tax is right
We review your code, income and reliefs, correct errors with HMRC, and make sure you are neither overpaying nor building a shortfall. Fixed fee.
Frequently asked questions
What does my tax code mean?
The number times 10 is your tax free allowance, so 1257L means £12,570 tax free. The letter carries meaning, such as L for the standard allowance or K for a code that adds tax.
How do I check my tax code?
Look in your Personal Tax Account or the HMRC app, where you can see the code and how it was worked out. Compare it to your income and any benefits.
What is a K tax code?
A K code means deductions such as benefits or untaxed income exceed your allowance, so tax is added to your pay rather than allowance being given.
Why is my tax code wrong?
Common reasons are changing jobs, a benefit starting or ending, having more than one income, or HMRC collecting an old underpayment through your code.
How do I correct a wrong tax code?
Contact HMRC or ask your accountant. HMRC can reissue the code, and you can reclaim overpaid tax or arrange to pay any shortfall.