Tax Code Review

A tax code is a fundamental part of the UK tax system, determining how much of your earnings is tax-free and how much Income Tax your employer deducts through the Pay As You Earn (PAYE) scheme. For the tax year 2024-2025, the standard tax code is 1257L, which reflects the Personal Allowance of £12,570. This means that individuals can earn up to this amount without paying any Income Tax.

In certain situations, you may encounter an emergency tax code, which typically appears as 1257L W1 or 1257L M1. These codes are used by HMRC when they do not have enough information about your income or tax situation, such as when you start a new job without providing a P45 from your previous employer. The “W1” (week one) and “M1” (month one) suffixes indicate that the taxation is applied on a non-cumulative basis for that specific pay period.

Using these emergency codes means that your tax calculations will not take into account any previous earnings or tax deductions, which may lead to under-taxation, over-taxation, or fluctuations in your take-home pay. It’s important to have the correct tax code to avoid tax liabilities and prevent overpaying during employment. If you believe you are on an emergency code, contact HMRC or your employer’s payroll department to resolve the issue and ensure the correct code is used going forward.

You should check your code on each payslip, P60 and in your Personal Tax Account. Life changes—starting a second job, receiving benefits in kind (such as a company car), or owing tax from a prior year—trigger code updates. If you suspect your code is incorrect, use HMRC’s online form or call their helpline to request a review. You provide details of all income sources, benefits and expenses. HMRC then issues a coding notice to your employer, who adjusts your deductions. Regular reviews prevent unexpected tax bills or the need for a P800 calculation and ensure your PAYE deductions match your circumstances.