UK Tax Checker 2025/26

Common Reasons You Might Be Paying Wrong Tax

Around 5 million people in the UK are on the wrong tax code at any given time. That is not a guess — HMRC themselves have acknowledged the scale of the problem. The most common reasons your tax might be wrong fall into a handful of categories, and most of them are entirely fixable once you spot them.

Wrong Tax Code After Changing Jobs

This is the single biggest cause of incorrect tax. When you leave one employer and start with another, your new employer needs your P45 to put you on the right tax code. If it does not arrive in time — or gets lost in the post — your new employer will either put you on an emergency code or, worse, on BR (basic rate). That means every penny of your salary gets taxed at 20% with no Personal Allowance. On a £30,000 salary, that is £500 per month in tax instead of the correct £290. You would be overpaying £210 every single month until someone fixes it.

Emergency Tax Code (M1/W1)

If your payslip shows a code ending in M1 or W1 — such as 1257L M1 — you are on emergency tax. The M1 suffix means your tax is calculated on a "month 1" basis, treating each month in isolation rather than cumulatively. In month 1, this gives you the right result. But from month 2 onwards, it often leads to overpaying because the cumulative carry-forward does not happen. On a £35,000 salary, emergency tax typically costs you £20–£60 extra per month from month 2 onwards.

Marriage Allowance Not Applied

If your spouse or civil partner earns less than £12,570 and you are a basic rate taxpayer, they can transfer £1,260 of their Personal Allowance to you. This saves the higher earner £252 per year (£1,260 at 20%). Millions of eligible couples have never claimed this. Your tax code would change from 1257L to 1383L if the transfer is applied, or your partner's code would change to reflect the reduction.

Multiple Jobs Without Proper Code Split

If you have two jobs, your Personal Allowance should be allocated to one of them — usually the higher-paying one. That job gets 1257L, and the second job gets BR (all taxed at 20%). Problems arise when HMRC splits the allowance incorrectly, or when both jobs are assigned 1257L, meaning you underpay all year and get hit with a bill in January.

Benefits in Kind Not Reflected

If your employer provides benefits like a company car, private medical insurance, or a gym membership, the taxable value of those benefits should be reflected in your tax code. A company car worth £5,000 in benefit-in-kind would reduce your code from 1257L to 757L, meaning your effective Personal Allowance drops to £7,570. If HMRC has not updated your code, you will underpay tax during the year.

Student Loan Repayments

Strictly speaking, student loan repayments are not tax — but they appear on your payslip alongside PAYE and NI, which leads many people to think their "tax" is too high. Plan 1 deducts 9% of earnings above £24,990, Plan 2 deducts 9% above £27,295, and Plan 5 (postgraduate) deducts 6% above £21,000. These are separate from income tax and will not appear in your tax code. If your payslip tax looks high, check whether student loan deductions are inflating the total.

How to Read Your Tax Code

Your tax code is not random — every letter and number tells you something specific about your tax situation. Once you understand how to read it, you can spot errors yourself before they cost you money.

The Number

The number in your tax code represents your tax-free Personal Allowance, divided by 10 and rounded down. So 1257 means a Personal Allowance of £12,570. If your code is 1000L, your allowance is £10,009. The number drops when HMRC adjusts your code to collect tax on untaxed income or benefits in kind. A code of 900L, for example, gives you an allowance of £9,009 — meaning you have roughly £3,561 of adjustments reducing your standard allowance.

The Letters

The letter after the number tells you the type of allowance:

• L — You are entitled to the standard Personal Allowance. This is the most common suffix.
• M — You have received a transfer of 10% of your partner's Personal Allowance (Marriage Allowance).
• N — You have transferred 10% of your Personal Allowance to your partner.
• T — Your code includes other calculations to work out your Personal Allowance. HMRC uses this when the standard categories do not apply.

Special Codes

Prefix Letters

• S — Scottish taxpayer. You pay Scottish income tax rates (19% starter, 20% basic, 21% intermediate, 42% higher, 45% advanced, 48% top).
• C — Welsh taxpayer. Currently the same rates as England and Northern Ireland, but Wales has the power to vary them.

K Codes

K codes are unusual but important. A K code means your deductions and benefits-in-kind exceed your Personal Allowance, creating a negative allowance. K497, for example, means £4,970 is added to your taxable income rather than deducted from it. This typically happens when you have a company car, private medical insurance, and state pension all pushing your adjustments above £12,570. HMRC limits K code deductions to 50% of your gross pay in any pay period to prevent excessive deductions.

M1/W1 Suffix

The M1 (month 1) or W1 (week 1) suffix indicates emergency tax on a non-cumulative basis. Each pay period is treated independently — there is no carry-forward of unused allowance from previous months. This is a temporary measure used when HMRC does not have your full tax history for the current year.

What to Do If You're Overpaying Tax

Discovering you have been overpaying tax is frustrating, but the good news is that HMRC will refund what you are owed. Here is exactly how to sort it out.

Step 1: Check Your Personal Tax Account

Go to gov.uk/check-income-tax-current-year and log in with your Government Gateway ID. This shows your current tax code, how it was calculated, and an estimate of your income tax for the year. If the code is wrong, you can update your details directly and HMRC will issue a corrected code to your employer.

Step 2: Contact HMRC

If you cannot resolve it online, call HMRC's Income Tax helpline on 0300 200 3300 (Monday to Friday, 8am to 6pm). Have your National Insurance number and most recent payslip ready. The adviser can update your tax code immediately and arrange for any overpayment to be refunded through your next payslip or as a direct payment.

Step 3: Claim for Previous Years

You can claim a tax refund for up to 4 previous tax years. If you have been on the wrong code for 3 years, HMRC will calculate the total overpayment and refund it. Use form P87 if you need to claim tax relief on work expenses, or request a review of previous years through your Personal Tax Account. Refunds are typically processed within 5–6 weeks and paid directly to your bank account.

Step 4: Check Your Expenses

Many employees are entitled to tax relief on work expenses they do not claim. If you wash your own uniform, work from home, or pay professional subscription fees, you may be owed additional money. Flat rate expense allowances range from £60 to £140 per year depending on your industry, and working from home relief is £6 per week (£312 per year at the basic rate, saving £62.40).

Tax Code Changes for 2025/26

The 2025/26 tax year (6 April 2025 to 5 April 2026) continues the freeze on income tax thresholds that has been in place since 2021/22. Here is what you need to know.

Frozen Thresholds

• Personal Allowance: Frozen at £12,570 (originally set for 2021/22, now frozen through to 2027/28)
• Basic Rate band: Frozen at £37,700 (meaning higher rate kicks in at £50,270)
• Additional Rate threshold: £125,140 (reduced from £150,000 in April 2023)

The freeze means that as wages rise with inflation, more people are dragged into higher tax bands — a process known as fiscal drag. Someone earning £50,000 in 2021/22 was well within the basic rate band. Today, the same salary is right on the boundary of the higher rate. A pay rise to £51,000 would push £730 into the 40% band, costing an extra £146 in tax that would not have applied if thresholds had risen with inflation.

Scottish Tax Rates 2025/26

Scotland has its own income tax rates set by the Scottish Parliament. For 2025/26:

If your tax code starts with S (e.g. S1257L), our checker automatically applies Scottish rates to your calculation.

Emergency Tax Codes Explained

Emergency tax is one of the most common reasons people overpay. It typically happens in one of three situations:

When You Start a New Job Without a P45

If you do not give your new employer a P45 from your previous job, they have no way of knowing your tax history for the current year. They will either use a Starter Checklist (formerly P46) or default to an emergency code. The emergency code 1257L M1 gives you the right Personal Allowance but calculates tax on a non-cumulative basis, ignoring what you have already earned and paid.

How Much Extra You Might Be Paying

The impact depends on when in the tax year you start and your salary level. If you start a £35,000 job in September (month 6) on emergency tax, you would pay approximately £25 more per month than on the correct cumulative code for months 6–12. Over 7 months, that adds up to about £175 in overpaid tax. For higher earners, the impact is larger — a £55,000 salary on emergency tax from month 6 could mean £50–£80 per month in overpayments.

How to Get It Corrected

Your employer should notify HMRC through their Full Payment Submission (FPS) when they first pay you. HMRC usually issues the correct code within 4–6 weeks. If it is not corrected after 2 months, contact HMRC directly. Once corrected, your employer will refund any overpaid tax automatically through your next payslip by applying the correct cumulative calculation.