The Government website also explains what a tax code means, and how it is worked out.
Tax codes normally start with a number and end with a letter, and the one that is currently used for most people who have one job or pension is 1250L.
The number part relates to the £12,500 Personal Allowance, and L means the person is entitled to the standard tax-free Personal Allowance.
“The numbers in your tax code tell your employer or pension provider how much tax-free income you get in that tax year,” the Government website states.
To derive the number, HMRC works out the person’s tax-free Personal Allowance.
