Free Tax Code Calculator

Free Tax Code Calculator
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Your tax code may appear to be just a simple sequence of numbers, but it can significantly affect your finances. Annually, errors in tax codes impact millions of individuals, potentially resulting in £1,000s owed to them. To ensure your tax code is accurate, use our Tax Code Calculator for a quick verification. If you find discrepancies, continue reading to learn how to address underpaid or overpaid taxes.

1-min read to check your tax code

Use this summary and our calculator links if you’re confident in your understanding. Otherwise, refer to our comprehensive guide below for detailed assistance.

• Know your tax code? If so, head straight to our Tax Code Calculator.
• Don’t know your tax code? Here’s how to find it – though if you have one employer and earn under £100,000, it’s likely to be 1257L (with an S at the start if you live in Scotland and a C at the start if you live in Wales).
• Overpaid (or underpaid) tax? We’ve full info on your next steps, whether you’ve underpaid tax and have a bill to pay, or you’ve overpaid tax and are due a rebate.

What is a tax code?

A tax code is simply a series of numbers and letters, for example 1257L, S1257L, C1257L, BR, and K497.

If you work full or part-time, or collect a private pension, these symbols are utilized by your employers or pension providers to determine the tax amount that needs to be subtracted from your salary or pension before it is deposited into your bank account.

This is referred to as the pay-as-you-earn (PAYE) system, although not everyone is taxed through this method. If you are entirely self-employed, unemployed, or solely receive the state pension, you will not have a tax code.

How do I find my tax code?

Each source of income you receive, such as employment or private pensions, will be assigned a distinct tax code. It’s important to review each one. Here are the ideal spots to find your tax code(s).

Where to look for your tax code

Now that you understand what a tax code is and know how to locate yours, this page will assist you in interpreting the significance of its letters and numbers.

What your tax code means

Your tax code typically consists of a combination of letters and numbers. For instance, if you have a single employer, do not receive work benefits (like a company car), reside in England or Northern Ireland, and earn less than £100,000, your tax code for the 2024/25 tax year is likely to be:

The letters and numbers indicate different things…

Numbers show the amount you can earn tax-free (your personal allowance)

To get the actual number, you need to add a zero. Thus, 1257 translates to £12,570, which is the annual amount you can earn without paying tax. This sum, which your employer uses to determine when to start deducting tax, is known as your personal allowance.

The amount of this allowance is influenced by your income and any applicable deductions (such as workplace benefits like a company car, subsidized rent, or health insurance) or additions (like tax relief for working from home). If your income exceeds this allowance, you are required to pay tax on the excess amount. The exact tax payable is determined by your overall earnings (refer to the current tax rates for details).

It’s important to note that Universal Credit and Working Tax Credit are considered ‘means-tested’ benefits. Therefore, they are not subtracted from your personal allowance. For more detailed information, please refer to our comprehensive guides on Universal Credit and Tax Credit.

Letters relate to your situation and how it alters your personal allowance

Typically, the letters appear at the end of your tax code. However, if you’re a resident of Scotland, your code will start with an S (for example, S1257L), while if you’re in Wales, it will begin with a C (such as C1257L). Check the letters from your tax code in the table below to verify their definitions. If they don’t match, it might suggest an error.

What the letters in your tax code mean

On page of this guide we’ll talk you through when it’s sensible to check whether you’re on the right tax code.

Check if your tax code is correct

Errors are abundant, so it’s important not to assume your code is flawless. Anyone can encounter issues, but if you find that any of the following situations have occurred recently, it’s crucial to address them promptly.

• Changed jobs? HM Revenue & Customs (HMRC) might mistakenly think you hold two jobs if your previous employer hasn’t updated them about your departure.
• Have more than one income? If you’re receiving income from multiple sources, such as a side job, you might discover that a portion of your earnings has been taxed incorrectly.
• Receive employee benefits? If your compensation includes company perks like a company car, a healthcare cash plan, or medical insurance, you might be facing incorrect taxation.
• Just started your first job? When young individuals start their first job partway through the tax year, it’s common for them to be placed on an emergency tax code. Don’t automatically expect that the figures in your initial paychecks are accurate.
• Have more than one pension or recently retired? If you are drawing funds from multiple pension sources, have retired within the past few years, or have recently begun receiving the state pension, there is a possibility that you may have been taxed incorrectly.

The Tax Code Calculator

The tax you owe is determined by your overall income for the year, which could come from various sources such as a single job, multiple jobs, savings interest, or rental income from an additional property you own. However, you will be entitled to just one personal allowance, which is the threshold amount you can earn before taxes apply, regardless of the number of income streams you have.

If you have just one job, you can easily calculate your taxes by entering your salary and tax code into our calculator. However, if you hold several jobs, you need to sum up your total personal allowance from all your tax codes. For instance, having tax codes 300L and 250L would provide a combined tax-free allowance of £5,500. Use this total allowance to compare against the results from the calculator for each salary and tax code you input.

This should provide you with a GENERAL sense of whether your tax code or codes are accurate (exact precision is unattainable). If something seems off, it might be wise to investigate whether you are due a refund or if you owe money. Check out the steps to take if you find your tax code is incorrect.

If you’re employed with a single employer, don’t have any work benefits, and you’re residing in England or Northern Ireland with an income below £100,000, your tax code for the 2024/25 tax year should be 1257L. For those living in Scotland, it will be S1257L, and for Wales, it will be C1257L.

Let’s delve into the steps you need to take if your tax code is incorrect. We’ll cover what actions to take whether you find yourself in the fortunate situation of receiving a refund due to overpayment, or in the less desirable position of needing to pay additional tax because of an underpayment.

What to do if your tax code’s wrong

Now that you have a grasp of your tax code’s significance, you can evaluate if it accurately reflects your earnings and circumstances. If your tax code seems off, there’s a good chance it is.

It’s your responsibility to ensure you’re on the correct tax code. There are two potential scenarios ahead, with one being notably more enjoyable than the other. If you’ve overpaid your taxes, continue reading. If you’ve underpaid, jump to the section titled “I’ve underpaid” for assistance.

I’ve overpaid tax – how do I get my cash back?

If your tax code is wrong the first thing to do is tell HM Revenue & Customs (HMRC) that you think your tax code may be wrong, and why.

It’s probably simplest to call HMRC on 0300 200 3300 so you can resolve your situation with a human and ask questions along the way. You can also use the HMRC app – see our guide to the HMRC app for full info.

Alternatively, you can contact HMRC online via your personal tax account to let it know your tax code is wrong – you’ll need to log in/set up an account using your Government Gateway or Gov.uk Verify ID.

How and when will I be repaid?

This situation hinges on the specific tax year associated with your claim. For the current tax year, if you find yourself overpaying taxes due to an incorrect tax code, HMRC will notify your employer. They will then update the tax code, and any excess tax you’ve paid will be reimbursed through your salary.

After the end of the tax year, HMRC will send you a P800 (or in some cases a ‘simple assessment’ letter). If you’re self-employed or the tax refund refers to previous tax years, you’ll be able to claim your refund online (your P800 will tell you if you can) or HMRC will send a cheque in the post.

In some cases, HMRC will pay a paltry rate of 0.5% interest on any tax you have overpaid.

How far back can I claim?

As mentioned earlier, HMRC will amend your tax code for the current year to rectify any mistakes. If the issue has persisted for a longer period, you are entitled to reclaim overpaid tax for up to FOUR additional years. This allows you to recover tax overpayments dating back to the 2020/21 tax year.

Nevertheless, even if the deadline for a specific tax year has lapsed, don’t be discouraged from pursuing your refund. In specific situations—such as when HMRC is responsible for the error—your claim may still be reviewed. So, don’t hesitate to assert your rights.

I’ve underpaid tax – what happens now?

Typically, you will need to repay the amount owed. HMRC usually has a four-year window to review and recover unpaid taxes, but this period can extend to six years if negligence is involved and up to 20 years for deliberate actions.

The process for settling your debt will vary based on the amount due and HMRC’s handling of your situation. It’s crucial to confirm that you and HMRC are in agreement regarding the amount of tax that has been underpaid.

But it wasn’t my fault I’m on the wrong code!

HMRC states that it is up to each person to verify that their tax code is correct. However, if you find that your tax code was incorrect, there are certain circumstances in which you might not be required to settle the tax bill. These situations may include:

• If your employer made a mistake and put you on the wrong tax code despite being sent the correct one by HMRC. In that case, HMRC should try first to recover the tax from your employer.
• If HMRC reviews your tax and finds an underpayment of £50 or less in the last year, it’ll write off the tax.
• If the underpayment was made in a tax year ending more than a year ago, you may be able to challenge via the not-so-catchy name of an extra-statutory concession – or an A19 (read more about this on Gov.uk and below).

See the Low Incomes Tax Reform Group’s guide on underpaid tax for more.

How to reject underpayments more than a year old

Employing an A19 clause—an obscure provision buried within the intricate regulations of HMRC—doesn’t offer a guarantee of success and is generally unlikely to be effective. However, there remains a chance, so it could be worth exploring.

Before considering this approach, you must meet the following criteria rigorously:

• The underpayment is more than 12 months old.
• HMRC was given the CORRECT information.
• You can demonstrate a ‘reasonable belief’ that your tax affairs were in order, which can be tricky – for example, if you suddenly started receiving loads more pay, it can be argued you should have spotted it!

This means that at present, if you underpaid in the 2022/23 tax year or earlier you may be able to go the A19 route. You will also need to have all your paperwork and dates in perfect order. You can apply for an exemption under an A19 simply by calling or writing to HMRC.

A19 doesn’t apply to me – I have to repay. How do I do that?

If you find that you owe the amount of tax HMRC asserts, repayment will be necessary. However, there’s some flexibility in how you pay it back. For debts under £3,000, HMRC might simply modify your tax code at the beginning of the new tax year to recover the owed amount.

For instance, if you are a basic-rate taxpayer at 20% and you underpaid £200 in the previous tax year, you would need to be taxed on an extra £1,000 of income in the upcoming tax year to cover this amount. If your tax code was 1257L, it would be adjusted to 1157L, reflecting £12,570 minus £1,000 with the final digit omitted.

For larger amounts, HMRC will send you a bill regardless of when it is in the tax year and give you 30 days to cough up. If you cannot make the payment, don’t worry – you can call HMRC and arrange a repayment schedule. For more information, read HMRC’s ‘Time to Pay‘ guidance and what to do if you’re in difficulties.

You’ve reviewed tax codes, examined your own, and perhaps found discrepancies in your payments. What’s the next step? On the sixth and final page of this guide, we’ll outline the actions you can take moving forward to ensure you are paying the correct amount of tax.

Check your code regularly, especially if your circumstances change

If you’re fortunate, setting up the correct tax code should simplify your dealings with HM Revenue & Customs (HMRC), clearing up the complexities of tax codes and the amount you owe. However, don’t rely too heavily on this outcome…

Even small changes can alter your code

Whenever your situation shifts—be it a job promotion with an increased salary, new employee perks, starting an additional job, pausing work to raise children, or relocating abroad and stepping away from the UK tax system—your tax code might be adjusted. It’s a good idea to contact HMRC to confirm your updated tax code in these scenarios.

Updating your details today can save an awful lot of hassle and expense in future. You can update these details (and others, such as your address) through your Gov.uk personal tax account or by using the HMRC app. Our full guide to the HMRC app explains how you can use the app to update your personal details.

If your situation is more complex, get free tax help

This guide offers a broad overview of tax codes to help you determine if you’re heading in the right direction. However, it should not replace personalized advice if you need it—always ensure that you’re confident about any decisions you make.

Several organizations provide assistance and guidance, with some offering their services free of charge. If you’re facing difficulties, consider reaching out to them:

• TaxAid – Can provide help and advice if you earn £20,000 a year or less and can’t resolve your issue directly with HM Revenue & Customs. Has a national helpline (0345 120 3779), provides help by email and has face-to-face services in Birmingham, London, Manchester and Newcastle.
• Tax Help for Older People – If you’re aged over 60, you can get help by sending a letter, emailing or by calling 01308 488066.
• Citizens Advice – Though this doesn’t provide advice on tax, it may help with related points such as benefits.

If you can afford to pay for advice and have more complex affairs, try the Chartered Institute of Taxation’s search to find a qualified tax adviser.