Tax codes explained
Your tax code will usually start with a number and end with a letter, for example, 115OL is the tax code currently used for most people who have one job or pension. As a general guide, you need to multiply your tax code by 10 to get the total amount of income you can earn each year before being taxed.
For example, the number 1000 was an indication of the proportion of your salary which would have been tax-free in the 2014/2015 tax year, which would be £10,000.
What do the tax code letters mean?
The tax code letter, which generally comes after the number, gives your employer further information on the types of allowance you receive or the rate of tax that should be charged.
The tax codes below are the most common ones you will come across:
All your pay from this source is taxed at the basic rate. This is because your allowances have already been used up against your other income.
All your income from this source is taxed at the higher rate (usually if you have more than one income source).
You are entitled to the basic personal allowance for a person under the age of 65.
You pay no tax on this income.
Used if your tax office needs to review your tax code – for example, if your tax affairs are complex. You can ask for a T code to keep your personal details confidential.
W1 or M1
These are temporary emergency tax codes.
Are you on the wrong tax code?
If you were on the wrong tax code, you may be owed a rebate. Use our tax rebate calculator to see an estimate of what is due to you. Else speak to one of our tax refunds consultants for a free, no-obligation consultation on +44 (0) 80 8141 5503 or email@example.comStart your claim