1257L Tax Code
Tax code 1257L is the standard tax code for the 2022/2023 tax year and the previous 2021/2022 tax year.
It is currently anticipated to be used until around 2026 however this could change in a future budget announcement.
Checking your 1257L tax code is a good idea to make sure it is correct for you. If it is wrong you can ask HMRC to change your code and include any relevant changes to your tax position.
Standard tax code 1257L
The 1257L tax code reflects the tax free personal allowance of £12570. The personal allowance is the amount you are allowed to earn before you pay income tax.
The numbers 1257 are given minus the zero because of the £12570 personal allowance with the letter L added to the end to show that you are entitled to the standard personal allowance for that tax year.
1257L and the tax free personal allowance
A tax code of 1257L gives you an allowance of £12,570 per annum before you start paying tax. When you start earning over the personal allowance you will pay 20% tax on your taxable earnings up to a limit of £50270.
The percentage of tax you pay then increases to 40% on earnings over £50271 up to £150,000. A top rate of tax is then introduced from £150,001 at 45%.
In Scotland tax rates exist which are slightly different which are detailed in our 2022/2023 tax free personal allowance for Scotland FAQ page.
Checking your 1257L tax code
Tax code 1257L is a standard tax code and should be accurate for many employees under PAYE who have only one form of employment with no employment expenses, employer benefits or additional income.
Employees with employment expenses will normally have a higher tax code reducing the tax you pay.
If you have employer benefits like a company car your tax code would be lower than the standard code because you will pay more tax due to the benefit.
Be aware that your tax code also needs checked if you change employer or if you have other forms of income from a pension or a rental property for example.
Finding your current tax code
If you are not sure what your current tax code is you can check your most recent pay-slip or use your personal tax account.
You might receive by post a P2 notice of coding from HMRC before the new tax year starts which explains the code that has been issued for the new tax year.
What to do if your tax code is wrong
The tax office or HMRC is the government department that manages tax codes and is who you will need to contact to make any alterations to your code.
Phoning HMRC isn’t always the quickest or easiest way to highlight and fix any coding errors or to question how your tax code has been created.
You can check your tax code online and follow the instructions on how to make amendments.
An early adjustment to your code is recommended because it limits the amount of incorrect income tax you will pay.
