Exactly what the letters and digits mean in your HMRC payslip tax code

HMRC works out each person's code based on their 'tax-free Personal Allowance and income you have not paid tax on'

Payslip tax codes might appear to be merely a jumbled collection of letters and digits, but they're actually vital in establishing how much tax you're liable for on your earnings . Should they be wrong, you could be due a rebate worth thousands of pounds .

While it's tempting to ignore this code when your salary lands in your bank account, it's critical to verify it's correct for your circumstances. HMRC calculates each person's code based on their 'tax-free Personal Allowance and income you have not paid tax on'.

This encompasses untaxed interest and part-time savings, plus the worth of perks such as a company car . According to the Government , the most com