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In short
- A tax code tells your employer how much tax-free pay to give you. The number times 10 is roughly your allowance.
- 1257L is the standard code for 2026 to 2027.
- Letters change the rule: BR, D0, D1 tax everything at one rate; K means you owe more; T, 0T and W1/M1 mean HMRC is unsure or waiting.
- A wrong code is the most common reason for overpaying without knowing.
The number
1257 means £12,570 of tax-free pay across the year. Higher numbers usually mean HMRC has added an expense allowance: 1263L is 1257L plus a £60 uniform allowance. Lower numbers mean something is being taken away: a benefit in kind, an underpayment from a past year, or untaxed income.
The letters
| Code | Meaning |
|---|---|
| L | Standard Personal Allowance |
| M or N | Marriage Allowance received or given |
| T | Other calculations were used to work out your allowance |
| 0T | No allowance. Used when HMRC has no details or the allowance is used up |
| BR | All pay taxed at 20%, usually a second job |
| D0, D1 | All pay at 40% or 45% |
| K | Deductions exceed allowance; you pay extra tax |
| NT | No tax |
| S or C prefix | Scottish or Welsh rates |
| W1, M1, X suffix | Emergency, non-cumulative |
The codes that usually mean you are overpaying
- BR on your only job. You are getting no allowance at all.
- 0T. Often set when you start a job without a P45. Should be temporary.
- W1 or M1. Emergency code that ignores earlier months, so a mid-year start or gap goes uncorrected until HMRC reconciles.
- K codes. Check the benefit or debt behind it still applies.
- T codes. A manual adjustment that may be out of date.
More detail: 1257L, BR, D0 and D1, Scottish and Welsh codes.
Worked example
A cleaner works two jobs. Job A pays £9,000 on 1257L and uses £9,000 of the £12,570 allowance. Job B pays £8,000 on BR, taxed at 20% from the first pound: £1,600 tax. With the spare £3,570 of allowance applied she should have paid £886. Overpaid £714 in one year.
How to fix a wrong code
Sign in to your personal tax account or call HMRC. Or start our check: your code is part of what we review, and past years are corrected through the claim.
Questions
My code changed and I do not know why.
HMRC sends a P2 coding notice explaining it. It is also in your personal tax account.
Can a wrong code be refunded for past years?
Yes, within the 4-year window.
This guide is general information, not advice about your circumstances. Figures use HMRC rates for the 2026 to 2027 tax year. We are a paid tax agent and not HMRC.
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