Tax codes with a K

What a K says

GOV.UK says a tax code with a K means you have income or deductions which are higher than your tax-free Personal Allowance and are not already being taxed.

GOV.UK says K means you have income that you are not paying tax on which is more than your Personal Allowance.

GOV.UK says that if you have a K in your tax code the calculation is different.

How a K number is used

A normal number is a tax-free amount. A K number is an amount to be added, so the sum is reversed.

GOV.UK's guidance for employers says to multiply the number in a K code by 10 to show how much should be added to taxable income before deductions are calculated. Its example: with the code K475 and a salary of £27,000, taxable income is £31,750 (£27,000 plus £4,750).

GOV.UK's guidance for employers says the letter K is used in a tax code when deductions due for company benefits, State Pension or tax owed from previous years are greater than the Personal Allowance.

GOV.UK's guidance for employers says you usually multiply the number in a tax code by 10 to get the total amount of income that can be earned before being taxed. Its example: with the code 1257L, an employee can earn £12,570 before being taxed.

When it happens

GOV.UK gives these examples of when a K code can happen: you are paying tax you owe from a previous year through your wages or pension, you get State Pension or taxable state benefits, you get company benefits you need to pay tax on (such as a company car), or you get more interest on your savings than your Personal Savings Allowance.

GOV.UK says your employer or pension provider uses the K tax code so that you pay tax for your other income or deductions at the employment or pension that the code is used on.

Why any tax code can change

GOV.UK also lists these reasons for a change: your employer tells HMRC you have started or stopped getting benefits from your job, you claim Marriage Allowance, you claim expenses that you get tax relief on, you are paying the High Income Child Benefit Charge through your wages or pension, you need to pay back the Winter Fuel Payment or Pension Age Winter Heating Payment, or you have been on the wrong tax code and owe tax.

The limit

Employers and pension providers cannot take more than half of your pre-tax wages or pension when using a K tax code.

GOV.UK's guidance for employers says the tax deduction for each pay period cannot be more than half of an employee's pre-tax pay or pension.

If too little tax was paid

If you have not paid enough tax, GOV.UK says HMRC will estimate how much tax you owe when your tax code is updated, adjust your tax code to collect the tax over one or more tax years if possible, and check your tax after the end of the tax year and send you a letter if you have not paid the right amount. It adds that you will have an emergency tax code until the end of the tax year, and a non-emergency tax code in the new tax year.

K with an S or a C

If you are employed or get a pension and pay Scottish Income Tax, your tax code starts with an S. GOV.UK says this tells your employer or pension provider to deduct tax at the Scottish rate.

You pay tax at the Welsh rates through PAYE if you are employed, or have it deducted by your provider if you get a pension. GOV.UK says HMRC will add a C to the start of your tax code so that you pay the right rates.

• Scottish codesScottish rates and the S codes
• Welsh codesWelsh rates and the C codes

After the year ends

After the end of the tax year, HMRC gets income details from employers, pension providers and the benefits office. GOV.UK says HMRC will then check how much tax you have paid, send you a letter if you have not paid the right amount, let you know how to get your refund if you have paid too much, and update your tax code if needed.

If you have paid too much or too little tax by the end of the tax year (5 April), GOV.UK says HMRC will send you either a tax calculation letter (also known as a P800) or a Simple Assessment letter, which tells you how to get a refund or pay tax you owe.

If your tax calculation letter says you owe tax, GOV.UK says HMRC will usually collect it by changing your tax code, which increases the tax deducted from your wages, salary or pension, usually in equal instalments for 12 months from the start of the following tax year.

If the code looks wrong

HMRC usually updates your tax code using information it gets from your employer or pension provider. GOV.UK says that if your tax code is wrong, it is usually because HMRC has incorrect or missing information, and that to correct it you check and update the details HMRC has about you.

GOV.UK says using the online service is the quickest way to check and update your details: sign in to the Check your Income Tax online service, check your employment, pension, estimated taxable income, company benefit and expenses details, and update your details if there is anything wrong or missing.

If you think your tax code is wrong and you cannot use the online service, GOV.UK says you can contact HMRC. HMRC's Income Tax enquiries line is 0300 200 3300. The Income Tax enquiries line is open Monday to Friday, 8am to 6pm, and closed on bank holidays.

• Tax code notice (P2)The letter HMRC sends when your code changes

GOV.UK pages on this

• GOV.UK: If you have a K in your tax codeGOV.UK's page on a K in your tax code.
• GOV.UK: What your tax code meansGOV.UK's page on what your tax code means: the numbers, the letters and a worked example.
• GOV.UK: Tax overpayments and underpaymentsGOV.UK's guide to tax overpayments and underpayments, including the P800 tax calculation letter.
• GOV.UK: Check your Income TaxGOV.UK's Check your Income Tax service for the current year, where you can see your tax code and Personal Allowance.

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