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.
1
One job or pension with the full Personal Allowance - 1257L (GBP 12,570 tax-free)
2
A second job or second pension - BR (all of it taxed at the basic rate, 20%)
3
Your Personal Allowance has been used up elsewhere - 0T (no tax-free allowance on this income)
4
Untaxed benefits or State Pension worth more than your allowance - A K code (the excess is added to...
5
Plus 3 more in the full guide
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