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Tax Codes

The code issued to an individual by HM Revenue and Customs may be any one of the following : -

D Prefix Tax Code
The D prefix tax code is normally used to deduct higher rate tax from employees in a second employment.

Emergency Tax Code
The emergency tax code is normally used where an employee's correct code number is not known and the code set by the budget is used every month is equivalent to the code of a person entitled to the single personal allowance.

A or H suffix Tax Code
These codes indicate an employee who is entitled to the minimum married couple's allowance - for further details please contact the Inland Revenue

K prefix Tax Code
The K code is used to collect income tax on benefits in kind where benefits exceed available allowances . K codes work by adding amounts on to gross pay to arrive at taxable pay (the opposite of a normal tax code which allow for an amount of free pay, thus reducing taxable pay)

L suffix Tax Code
An L suffix tax code indicates an employee who is entitled to the basic personal allowance.

NT (No Tax) Code
A NT tax code means that no tax is to be deducted under the PAYE system. NT codes are often used for self-employed individuals and overseas employees who are exempt from paying NIC.'s

P suffix Code
A P suffix code indicates that the employee is entitled to the full personal allowance

T suffix Tax Code
A T suffix indicates that the employee is not in any of the other suffix categories and budget changes cannot be dealt with on a group basis. The 'T' effectively stands for a Temporary code and is used until the employee's tax office can establish his or her tax status. Alternatively the employee may be aged over 75 and married, may have another job or self-employment against which part of the personal allowances are set, or simply not wish the employer to know what allowances are comprised in the code.

Y Suffix Tax Code
A Y suffix indicates that the employee is entitled to the full personal allowance.

 

For further information, please visit:

HMRC Tax Codes