Your tax code tells your employer how much of your income is tax-free before Income Tax is applied. The standard tax-free Personal Allowance is £12,570 a year, which is why the most common UK tax code is 1257L. Newcomers are often placed on an emergency code at first and taxed too much, then refunded once HMRC has their full details. This guide shows you how to read your code, spot an error, and get it fixed.
How to read your tax code
A tax code is usually made of numbers followed by a letter. The numbers show your tax-free allowance for the year, divided by ten. So 1257 means £12,570 of tax-free income. The letter describes your situation. In the code 1257L, the L means you get the standard Personal Allowance.
What the letters mean
| Letter | Meaning |
|---|---|
| L | You get the standard tax-free Personal Allowance. |
| M | Marriage Allowance: you received 10% of your partner allowance. |
| N | Marriage Allowance: you gave 10% of your allowance to your partner. |
| BR | All income from this job is taxed at the basic rate, often used for a second job. |
| 0T | No Personal Allowance, or your new employer lacks the details to set your code. |
| D0 / D1 | All income taxed at the higher rate (D0) or additional rate (D1). |
| NT | No tax is taken from this income. |
Emergency tax codes
If you see W1, M1, or X after your code, you are on an emergency code. These are non-cumulative, meaning tax is worked out only on the current pay period rather than your whole year to date. Emergency codes are common for people who have just started their first UK job, and they usually mean you pay more tax than you should until your correct code is applied.
Why newcomers often get overtaxed at first
When you start your first job in the UK, your employer may not yet have a full tax history for you, so HMRC applies a temporary or emergency code. This can leave you with little or no Personal Allowance, so your first payslips look heavily taxed. This is normal and fixable. Once HMRC receives your details, your code is corrected and any tax you overpaid is usually refunded automatically through your pay, or after the tax year ends.
How to check your tax code
You can find your current tax code in several places:
- On your payslip.
- In your online personal tax account on GOV.UK.
- In the free HMRC app.
- On a Tax Code Notice (form P2) that HMRC posts to you.
How to fix a wrong tax code
If you think your code is wrong, for example you are on an emergency code months after starting, contact HMRC through your personal tax account, the app, or by phone. Have your National Insurance number and a recent payslip ready. If you overpaid, HMRC refunds it, either automatically or after you claim. If you underpaid, HMRC usually adjusts your future code to collect it gradually.
Frequently asked questions
What does 1257L mean?
It means you get the standard £12,570 tax-free Personal Allowance (1257) and are entitled to it in full (L). It is the most common code for people with one job or pension.
Why is my first UK payslip taxed so much?
You are probably on an emergency code because HMRC does not yet have your full details. Once your record is complete, your code is corrected and overpaid tax is normally refunded.
How do I get a tax refund if I was overcharged?
In most cases HMRC refunds overpaid tax automatically once your code is fixed, either through your pay or after the tax year ends. You can also check and claim through your personal tax account.
Do I need a National Insurance number to have a tax code?
They work together but are separate. See our guide on how to get a National Insurance number.
For the full picture of setting up your finances, see the UK money guide for newcomers.
