Freedom Isn’t Free UK Personal Finance
Tax
UK Tax Codes Explained 2026/27: How They Work
HMRC works out your tax code by totalling your tax-free allowances, deducting any untaxed income, and dropping the last digit of the result. The number is your tax-free amount divided by ten; the letter reflects your situation. The standard 2026/27 code is 1257L, giving the full GBP 12,570 Personal Allowance.
Which tax code each situation usually produces (2026/27)
| Your situation | Tax code you usually get |
|---|---|
| One job or pension with the full Personal Allowance | 1257L (GBP 12,570 tax-free) |
| A second job or second pension | BR (all of it taxed at the basic rate, 20%) |
| Your Personal Allowance has been used up elsewhere | 0T (no tax-free allowance on this income) |
| Untaxed benefits or State Pension worth more than your allowance | A K code (the excess is added to your taxable pay) |
| Scottish taxpayer | An S prefix, for example S1257L |
| Welsh taxpayer | A C prefix, for example C1257L |
| New job started without a P45 | Emergency code 1257L W1, M1 or X |