When HMRC issues NT codes
The NT code is rare and is only issued in specific HMRC-approved circumstances:
- Non-UK resident under double-tax treaty — where the treaty gives sole taxing rights to the country of residence (typically pensions and certain royalties). The non-resident applies on form DT-Individual to claim treaty exemption.
- Crown Dependency pensions — Isle of Man, Jersey, Guernsey government pensions paid to UK residents under specific treaty terms.
- Judicial and police pensions paid abroad — certain narrowly-defined categories.
- UK income covered by domestic exemption — e.g. some scholarship payments.
- Diplomats and accredited international staff with treaty-based exemption.
NT does NOT apply to:
- Standard UK employees (always 1257L or similar).
- UK-resident pensioners (always coded with allowances, even if no tax due).
- UK self-employed (no PAYE code).
- Most UK retirees living abroad (typically still subject to UK tax on UK-source income; relief may apply via treaty after filing).
Applying for an NT code
Most NT codes are issued only after a successful treaty claim. Process:
- Establish your tax residence in the other country (e.g. France, Spain, USA).
- Obtain a residence certificate from the foreign tax authority.
- Complete HMRC form DT-Individual (or DT-Company for entities) and submit with the residence certificate.
- HMRC reviews (typically 2–4 months) and either issues NT to your UK pension provider or denies the claim.
- Future payments arrive gross of UK tax. You declare them in your country of residence under their rules.
If you simply move abroad and inform your employer/pension provider without going through HMRC, the default may be 0T (emergency, no allowance, but progressive bands) rather than NT — meaning UK tax continues to be deducted. The DT form is the formal route to NT.
NI consideration: NT removes income tax but doesn't automatically remove NI. NI continues if you're still resident in the UK or covered by a UK-EU social security agreement. Non-residents working abroad may need an A1 (UK) or CA3822 form to confirm exemption.
Three worked examples (UK 2025/26)
Example 1: UK pensioner moved to Spain, treaty NT
Helen retired to Spain and applied for NT on her £25,000 UK private pension under the UK-Spain double tax treaty.
Calculation: UK income tax £0 (NT applied). Spain taxes the £25,000 under Spanish progressive rates. NI: £0 (non-resident, no Class 1 NI on pension). Helen receives £25,000 gross, then pays Spanish income tax (typically 19-30% on this amount under Spanish rules).
Example 2: Diplomat in UK with treaty exemption
Pierre is a French diplomat working at the French Embassy in London. His diplomatic salary has NT under the Vienna Convention.
Outcome: £0 UK tax, £0 UK NI on diplomatic salary. France taxes it under French rules.
Example 3: UK employee mistakenly given NT — error
James starts a new UK job; HMRC erroneously issues NT (system glitch).
Outcome: Initially £0 UK tax deducted on £45,000 salary. James notices and contacts HMRC. They reissue 1257L and adjust prior months. Reconciliation produces a balancing PAYE deduction over the next few payslips.
Common mistakes to avoid
- Believing NT means 'no income tax ever' — it applies to that source only, not to other UK income you may have.
- Assuming NT removes NI — it doesn't (consider A1 / E101 for cross-border NI).
- Moving abroad without applying for NT via DT-Individual — leaves you on 0T (still deducting tax).
- Forgetting that NT income may still be reportable in another country.
- Treating NT as a permanent code — HMRC reviews if circumstances change (e.g. you return to UK residence).
- Believing crown employees automatically get NT abroad — most are taxed in the UK regardless of residence.
When to use this calculator
Use this guide and calculator if you've moved abroad or expect treaty-based tax exemption on UK pensions/income. Re-run any time your residence changes — NT can be granted, modified, or revoked. UK-resident NT recipients (rare — diplomats etc.) should verify continued eligibility annually.
Regional differences (Scotland, Wales, Northern Ireland)
NT is a UK-wide concept administered by HMRC; it does not vary by where in the UK the income source is located. Scottish, Welsh, and Northern Irish income can all carry NT codes if treaty conditions are met. The recipient's country of residence (not the source country in the UK) determines how the income is then taxed.