What is a tax code?
If you pay tax through the PAYE system, your tax code lets your employer or pension provider know how much tax to deduct from your wages or pension before the funds hit your bank account.
Where can you find your tax code?
Your tax code can be found on your PAYE Coding Notice (P2). A copy of this is sent to you and your employer just before the beginning of the new tax year.
The P2 explains how to deduct tax and how your tax code was reached.
It can also be found on:
- Your payslip: you will receive a payslip each time you are paid (at whatever intervals – for instance, weekly or monthly)
- Your P45: your employer will issue you with a P45 when you stop working for them. You will give your P45 to your new employer when you start working for them
- Your P60: Your employer will issue you with a P60 at the end of each tax year, which is a summary of your salary and the tax deducted
- HM Revenue and Customs
(HMRC): you can contact your tax office with your National Insurance number and a tax agent will disclose your tax code to you (pending your answers to security questions)
- Tax code for pensions: if you are receiving a private pension, you will find your tax code on any pension advice slip.
What should you do if your tax code is wrong?
It is your responsibility to ensure that you are on the right tax code.
If the numbers and letters on your code do not relate to your circumstances or your payslip shows that the incorrect amount of Income Tax is being deducted, your tax code may be wrong.
If your tax code is wrong, contact HMRC and let them know. You can do so by calling 0300 200 3300 or you can complete an online form on the HMRC website.
If HMRC agrees that your tax code is wrong, they will make the necessary adjustment to your tax code so that you:
Pay the correct amount of tax for all your income, spread over a year
Get the Personal Allowance you are entitled to.