Tax code change: How to check your tax code from HMRC is correct ahead of 2021/22 tax year | Personal Finance | Finance

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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.





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