A Guide To Tax Codes
What are tax codes?Tax codes are usually made up of one letter and several numbers, for example: 522L or K497
If your tax code is a number followed by a letter
If you multiply the number in your tax code by 10, you'll get the total amount of income you can earn in a year before paying any tax,
The letter shows how the number should be adjusted following any changes to allowances announced by the Chancellor, common tax code letters are explained below
| Code | Reason for use |
|---|---|
| L | for those eligible for the basic personal allowance |
| P | for persons aged 65 to 74 and eligible for the full personal allowance |
| V | for persons aged 65 to 74, eligible for the full personal allowance and the full married couple's allowance (for those born before 6 April 1935 and aged under 75) and estimated to be liable at the basic rate of tax |
| Y | for persons aged 75 or over and eligible for the full personal allowance |
| T | if there are any other items HM Revenue & Customs (HMRC) needs to review in your tax code |
| K | when your total allowances are less than your total 'deductions' |
Other tax codes
If your tax code has two letters but no number, or is the letter 'D' followed by a zero, it
normally indicates that you have two or more sources of income and that all of your allowances have been applied to the tax code and income from your main job.
| Code | Reason for use |
|---|---|
| BR | Is used when all your income is taxed at the basic rate of 20% (currently 20%) BR tax code is most commonly used for a second job) |
| DO | Is used when all your income is taxed at the higher rate of tax (currently 40%) DO tax code is most commonly used for a second job) |
| NT | Is used when no tax is to be taken from your income or pension |
