Tax codes decoded
Lesson 4 of 16 in our free Work, Payslips & Tax guide: a 5-minute money game with the key points below.
This lesson is in the full version.
Free with a code from your uni, college, council, landlord or employer (worth £600/year). Lesson 1 of Work, Payslips & Tax is free for everyone.
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Questions you'll answer
Tax code 1257L. How much can you earn this tax year before paying income tax?
Mo's code ends in 'M1'. What does that mean?
Quick facts
- 1257L → Standard / normal. Standard Personal Allowance. The default for most people with one job.
- BR → Emergency or no allowance. All pay taxed at the 20% basic rate — no tax-free amount. Common on a second job.
- 0T → Emergency or no allowance. No Personal Allowance at all. Often used when HMRC doesn't have your details.
- S1257L → Where you live. S = Scottish taxpayer, so Scottish rates apply.
- C1257L → Where you live. C = Welsh taxpayer (rates currently match England's).
- Fact: “Your tax code can change during the year.” — New job, benefits in kind, owed tax… HMRC updates it and tells your employer.
- Myth: “If your tax code is wrong, it's your employer's job to make up a new one.” — HMRC sets your code. You fix it via HMRC (app or online account), and your employer then uses the new one.
- Fact: “A 'K' code means you have more to pay tax on than your allowance covers.” — K codes add income — often from untaxed income or benefits in kind.