A1 Payroll

What are tax codes?
Tax codes are usually made up of one letter and several numbers, for example: 522L or K497

If your tax code is a number followed by a letter
If you multiply the number in your tax code by 10, you'll get the total amount of income you can earn in a year before paying any tax,

The letter shows how the number should be adjusted following any changes to allowances announced by the Chancellor, common tax code letters are explained below

Other tax codes
If your tax code has two letters but no number, or is the letter 'D' followed by a zero, it
normally indicates that you have two or more sources of income and that all of your allowances have been applied to the tax code and income from your main job.

**Common tax code letters and what they mean**
Tax Code	Reason for use
L	for those eligible for the basic personal allowance
P	for persons aged 65 to 74 and eligible for the full personal allowance
V	for persons aged 65 to 74, eligible for the full personal allowance and the full married couple's allowance (for those born before 6 April 1935 and aged under 75) and estimated to be liable at the basic rate of tax
Y	for persons aged 75 or over and eligible for the full personal allowance
T	if there are any other items HM Revenue & Customs (HMRC) needs to review in your tax code
K	when your total allowances are less than your total 'deductions'
BR	Is used when all your income is taxed at the basic rate of 20% (currently 20%) BR tax code is most commonly used for a second job)
DO	Is used when all your income is taxed at the higher rate of tax (currently 40%) DO tax code is most commonly used for a second job)
NT	Is used when no tax is to be taken from your income or pension

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