Accounting, self-assessment, Taxation

What your Tax Code means

Letters in your tax code refer to your situation and how it affects your Personal Allowance.

Letter What it means
L You’re entitled to the standard tax-free Personal Allowance
M Marriage Allowance: you’ve received a transfer of 10% of your partner’s Personal Allowance
N Marriage Allowance: you’ve transferred 10% of your Personal Allowance to your partner
S Your income or pension is taxed using the rates in Scotland.
T Your tax code includes other calculations to work out your Personal Allowance, for example it’s been reduced because your estimated annual income is more than £100,000
0T Your Personal Allowance has been used up, or you’ve started a new job and your employer doesn’t have the details they need to give you a tax code
BR All your income from this job or pension is taxed at the basic rate (usually used if you’ve got more than one job or pension)
D0 All your income from this job or pension is taxed at the higher rate (usually used if you’ve got more than one job or pension)
D1 All your income from this job or pension is taxed at the additional rate (usually used if you’ve got more than one job or pension)
NT You’re not paying any tax on this income
W1 or M1 Emergency tax codes
K at the beginning This means you have income that isn’t being taxed another way and it’s worth more than your tax-free allowance.

 

About Phoenix

Accountant | Tax Specialist | Dreamy Entrepreneur | Blogger

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