Uff!The Taxes and the Exes always go above the heads. But you surely do not have to think about your Exes. But Taxes in the UK, Sure you do my brother. So, if you ever feel it is hard to understand what code you have received then Don’t Panic- It happens. To find out, You need a Good Guide, and Here is One and You will know why. Confused about What does 1256L Tax Code means, Then it’s time that you find it out.
What are Tax Codes UK?
To Define, A Tax Code is the UK Code used to Calculate How much Income tax you should pay from your Earnings/Pay or Pension. This is calculated by your Employer or Pension Provider. Then, The HM Revenue and Customs will let them what code to use.
In Short, These codes are made up in the form of Numbers and then Followed by a Letter Suffix. Finding What the Tax Code means to know What the Numbers and letters mean and how much tax you will have to pay.Also, What to do next. Simple, Continue reading below;
Numbers on Code: Let the Provider know How much Tax-free income you will get in the current tax year. Multiply the Number in the Code by 10 to get the Total Amount of Income One can earn before being taxed.
Letters on Code: Indicated the Situation and How it will be affecting your Personal Allowance. Each Letter has a Different meaning.
Initially, Refer to the table below and Learn about of List of Tax Code Letters and What They Mean.
You may also visit: What Time Of Day Do Refunds Go into the Bank?
What does the 1256L Tax Code mean?
Sometimes, It may be the situation, Where you are not able to understand the Tax Code. When the Code doesn’t line up with the Standard Personal Allowance, whether it’s 1256L or 1283L.This is because you have been granted some tax relief from the taxman which is effectively increasing your Personal Allowance too. Such reliefs in taxes are useful, although they might not match your Actual Expenses.
In the 1256L Tax Code, If your Tax Code is followed by the Letter L, This Letter L entitles you to the Standard Tax-Free Personal Allowance. Which represents the size of your tax-free Personal Allowance.
The Numbers on the Code are Multiplied by 10. So 1256 Χ 10 = 12560.Varying on your PAYE Earnings, You are listed to get £12560 tax-free allowance. And if you are under 65, earn less than £100K per year, Then Claim it.
- To Illustrate, If you have just started your First Job, been Five months right after the Start of the Financial year. You will be eligible to receive the One-Seventh of your Personal Allowance in each monthly salary.
The Total amount of money Per year that you can earn Tax-Free. Anything earned above is taxable. Whereas it is calculated using the formula below;
Personal Allowance Threshold – Taxpayer’s Annual Income.
Let us keep- Your Income is £10,000 and the Personal Allowance Threshold is £11,000. You receive the 1256L Tax Code,
£11,000-£10,000 = £1,000.
However,This relief in the allowance takes place and changes Every Tax Year by the UK government. So, Stay Updated.
UK Income Tax Rates 2023/24
The Updated UK Income Tax Rates from 6 April 2023 to 5 April 2024. In the UK Government, The Amount of Income Tax deducted from Employees depends on One’s Tax Code and How much is the allowance.
For the Employers 2023- 2024, The Rates and Threshold;
|
PAYE Tax Rate
|
Rate of Tax
|
Annual Earnings the Rate Applies to |
| Above the PAYE Threshold | ||
| ENGLAND AND NORTHERN IRELAND | ||
| Basic Tax Rate | 20% | Up to £37,000 |
| Higher Tax Rate | 40% | From £ 37,000 to £125,140 |
| Additional Tax Rate | 45% | Above £ 125,140 |
| SCOTLAND | ||
| Starter Tax Rate | 19 % | Up to £2,162 |
| Basic Tax Rate | 20% | From £2,163 to £13,118 |
| Intermeidate Tax Rate | 21% | From £13,119 to £31,092 |
| Higher Tax Rate | 42% | 31,093 to £125,140 |
| Top Tax Rate | 47% | Above £125,140 |
| WALES | ||
| Basic Tax Rate | 20% | Up to £37,000 |
| Higher Tax Rate | 40% | From £37,701 to £125,140 |
| Additional Tax Rate | 45% | Above £125,140 |
List of Tax Codes and What They Mean HMRC
LETTERS ON TAX CODE |
WHAT DO THEY MEAN |
| L | Entitled to a Standard Tax-Free Personal Allowance |
| M | Marriage Allowance- Receiving a transfer of 10% of the Partner’s Personal Allowance |
| N | Marriage Allowance- Transferring 10% of the Personal Allowance to the Partner. |
| T | Tax Codes include other calculations to work out your Personal Allowance. |
| OT | Personal Allowance is been used OR Started a New Job and The Employer do not have any details to give you a Tax Code. |
| BR | If you have more than one Job or Pension- Your Income will be taxed at the Basic rate. |
| DO | More than One Job or Pension- Income is taxed at the Higher Rate./ |
| D1 | More than One Job or Pension- Income is taxed at an additional rate. |
| NT | When you are not paying any tax on your income. |
| S | Income/Pension is taxed using the Rates in Scotland. |
SOT |
Personal Allowance is used up OR Started a New Job and The Employer does not have any details to give a Tax Code. |
| SBR | Income or Pension is taxed at the Basic Rate in Scotland. |
| SDO | Income or Pension is taxed at the Intermediate Rate in Scotland. |
| SD1 | All the Income or Pension is taxed at a Higher Rate in Scotland. |
| SD2 | All the Income or Pension is taxed at the Top Rate in Scotland. |
| C | Income or Pension is taxed using the rates in Wales |
| COT | Personal Allowance is used up OR Started a New Job and The Employer does not have any details to give a Tax Code. |
| CBR | Pension or Income is taxed at the Basic Rate in Wales. |
| CDO | All the Income or Pension is taxed at the Higher Rate in Wales. |
| CD1 | All the Income or Pension is taxed at an Additional Rate in Wales. |
| W1 or M1 or X | Emergency Codes |
| K | Income not being taxed and worth more than Tax-Free Allowance. |
How can you get an HMRC Tax Refund?
If by any chance the code you received is wrong and you already paid without going through, You can apply for a Refund.OR You have paid a lot more than the tax.
Therefore, Contact HMRC Support or Call 0300 200 3300 or GOV.UK Website.
What are Tax-Free allowances?
Tax-free allowances mean that you do not have to pay any tax from the part of your income. It is also the reduced amount of Tax on One’s income that are entitled to. The Amount changes every Year in the UK.
This Year 2023-2024, The Tax-Free Allowances that are provided are as below;
£12,570 (Unless your income is above £100,000, after which you lose £1 of personal allowance for every £2 earned). You can use the Net Salary Calculator UK.
| £ 242 Per Week |
| £ 1,048 Per Month |
| £ 12,570 Per Year |
How to Check Tax Code Lookup UK?
You can Check your Tax Code in Various ways;
- On the Official Portal by Logging to your Personal Tax Account.
- Using the HMRC App.
- Tax Code Look-up tools.
- OR Finally on the Tax Code Notice Letter received from the HMRC.
How do I find out my Tax Code?
Ofcourse, You will find your Tax Code on your PaySlip of the Current year or your PAYE P2 Coding Notice. You will receive at the beginning of the tax year, The Payslip containing the Tax Code and How it is calculated.
Can I Check Online My Tax Code?
Yes, You can easily check your Tax Codes and What they mean Online. You will need to log in to your Account on the Gov.UK.If you do not have an account- Create One.
- Visit the https://www.access.service.gov.uk/registration/email.
- Complete the On Screen Instructions and Check Online.
In Addition, You can also use the HMRC Platform or any Online Free Tax Code Calculator available on the browser.
Check to Know: What Age Do You Pay Tax?
That’s a Wrap!
Therefore, Let us end the code dose right here So that now you know What your code means. You can sleep, Work, and eat in Peace. Also, It is important to figure out How can you find it, Check it. In any stage of queries, you can always go up to the HMRC and File your Concerns. Do not wait for the issues that may mess up your Financial Life.