What your tax code means and where to find it.
Your tax code tells your employer or pension provider how much tax to take off your pay. To do this it usually has numbers and a letter, for example 1257L, 0T, BR, D0 or D1. These numbers normally show how much income you can have before you pay tax. For example, code 1257L usually means you get a tax‑free amount of £12,570 in the year.
The letter shows how the tax rules apply to you (for example, whether you get the standard allowance, or whether special rules apply). If your tax code is wrong, you can end up paying too much or too little tax during the year.
You can find your tax code;
on your payslip
on your P60 (given to you after the end of the tax year),
on letters or online messages from HMRC about your tax,
on your Personal Tax Account on the HMRC website.
What makes up your tax code?
HMRC starts with:
Your personal allowance (the amount you can earn before paying income tax).
Any extra tax‑free amounts, such as some work‑related expenses you pay yourself and claim from HMRC.
Then HMRC takes off:
The value of any benefits from your employer that are not already taxed through the payroll (for example, some company cars, private medical insurance).
Some types of untaxed income, such as small amounts of rental or other income.
Any tax you still owe from earlier years that HMRC has decided to collect through your tax code.
What is left is turned into the numbers in your code (by dividing by 10).
If the deductions are bigger than the allowances, you may have a code with no personal allowance (for example, 0T, BR, D0 or D1).
If you have more than one job or pension HMRC will usually give your full personal allowance to one job or pension. Your other jobs or pensions often have a code like BR, D0 or D1, which means all of that income is taxed at a flat rate with no personal allowance there.
Sometimes HMRC may split your allowance between jobs if that is more suitable. If the allowance is spread wrongly (for example, used twice, or not used on your main job), your tax will not be right.
Common problems with tax codes & how to check yours for the 2026-27 tax year.
There are some frequent issues, which occur in tax codes, such as:
The numbers don't match the allowance you should have for 2026–27.
Benefits (such as a company car or medical insurance) are missing, or the values are too high or duplicated.
HMRC has included other income (for example rental income) in your code, but you would rather pay that through a tax return.
Your code includes old tax debts or underpayments that you have already paid, or that you do not recognise.
Your allowance is given in more than one job or not given in the right place.
Your employer or pension provider is using the wrong code or has not updated it after HMRC sent a change.
So I'm sure your thinking to yourself, how do I check this?
When you receive your tax code for 2026–27 (or see it on your payslip), you should check:
The numbers:
Do they look right for your situation?
For most people, the standard code is 1257L, but this can change if your income is high or HMRC has added or removed items.
Benefits from your employer:
If you have a company car, medical insurance or other benefits, check that they appear once and that the figures look sensible.
If your employer “payrolls” your benefits, they may not appear in your code, because they are taxed through your pay instead.
Earlier tax debts or underpayments:
Look for any amounts being collected for previous years.
Check you still owe this tax and have not already paid it separately.
Other income:
Check if HMRC has included rental income or other untaxed income in your code.
If the estimate is wrong, or you prefer to pay this through a tax return, you can ask HMRC to change it.
More than one job or pension:
Make sure your personal allowance appears only once.
Other jobs or pensions should usually have codes like BR, D0 or D1, or another code clearly showing that all of that income is being taxed.
What to do if your tax code looks wrong
If you think your tax code is wrong or you do not understand it, you can:
Contact HMRC
You can phone HMRC, write to them, or use your Personal Tax Account online.
Tell them what you think is wrong (for example, “My company car has changed”, “This rental income estimate is too high”, or “You are still collecting an old debt that I have paid”).
Ask them to update your code. They will normally send a new code to you and to your employer or pension provider.
Ask HMRC not to include certain items
You can ask HMRC not to collect some items, such as rental income, through your tax code.
If you do this, you will usually need to complete a tax return and pay that tax separately.
If your employer has used the code wrongly
Speak to your payroll department first and ask them to check they are using the latest code from HMRC.
If the code is right but has been used incorrectly, HMRC may ask the employer to pay the missing tax.
In some cases, HMRC may decide that you must pay the shortfall, and they may adjust a future tax code to collect it.
Your tax code is the main way HMRC collects the right amount of tax from your wages or pension during the year.
For 2026–27, it is worth taking a few minutes to:
look at your tax code
understand what is included in it
contact HMRC quickly if anything looks wrong or unclear
This helps you avoid a surprise tax bill or refund after the end of the tax year.
If you need any tax advice in Milton Keynes give a call to the team at Holmes Accountancy on 01908 315716 or contact us here.
The tax tip is provided for general guidance only; further advice should be sought, for specific issues.
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