What is a K tax code? | Tax Codes Explained

Last reviewed January 2023

A tax code is a string of numbers and letters that tells your employer how your earnings should be taxed. You get one for each Pay As You Earn (PAYE) job you have, and it’s important to keep track of them. Any time your tax code changes, HMRC will alter the Income Tax you’re paying each year.

If you’ve got a K tax code for your job, it means you’ve got some income factored into it that isn’t being taxed any other way, and it’s over your Personal Allowance threshold. There are a few reasons why this can happen. For example:

You might still owe tax from a previous tax year.
You might be getting state or company benefits that you need to pay tax on.

Example of PAYE on tax code K

Let’s say you qualify for a standard Personal Allowance of £12,570, but you have some unpaid tax from a previous year and/or some tax to pay for the benefits you’re getting. Normally, on a standard L tax code, you’d simply have your tax-free Personal Allowance reduced to account for the extra tax you owe. However, if you owe enough this way to use up your entire Personal Allowance, you’ll be given a K tax code instead for the extra.

For example, suppose HMRC decides you owe tax on £15,000 of income or benefits that you aren’t already being taxed on some other way. You might be given a tax code of K243. This tells your employer to count your income as if it were £2,430 higher (the amount over your £12,570 Personal Allowance) when calculating how much tax to take out of it. It’s like having a negative Personal Allowance! It sounds nasty, but there are rules to give you a little protection. Whatever tax you owe, you can’t have more than half of your pre-tax pay taken out because of a K tax code.

How to change my K tax code

Most of the time, HMRC will alter your tax code for you as your circumstances change. However, there are times when you might end up on the wrong tax code – and when that happens you need to get it fixed fast. It’s your responsibility to get the problem sorted, and things can get very tricky if you don’t.

If you think your tax code’s wrong, you need to contact HMRC to make sure they have the information they need to put it right. If you’re claiming a tax rebate with RIFT, of course, we’ll check your tax code for you as part of the service. If you’re ever given the wrong code, we’ll get it corrected for you.

Could I be due a tax rebate?

Being on the wrong tax code can easily leave you paying the wrong amount of Income Tax on your earnings. For example, this can happen when:

You change jobs and your new employer doesn’t have the information they need to tax your pay properly.

You have a spouse who isn’t using all of their tax-free Personal Allowance, and you’re not claiming Marriage Allowance to transfer a chunk of their allowance to you.

You’ve claimed a tax refund and HMRC has altered your tax code to factor in your expenses. If those expenses change from year to year, your tax code can end up wrong.

Any of these situations can mean you’re paying too much Income Tax and might be able to claim a tax refund. Get in touch with RIFT to find out more about tax rebates, and to see how the UK’s leading experts can get back everything you’re owed.

What is tax code K and why have I got it?

Example of PAYE on tax code K

How to change my K tax code

Could I be due a tax rebate?

Want more?Want to save some money?

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M1 tax code

NT Tax Code

1257L Tax Code

What is tax code K and why have I got it?​

Example of PAYE on tax code K

How to change my K tax code

Could I be due a tax rebate?

Want more?Want to save some money?

More on tax codes

M1 tax code

NT Tax Code

1257L Tax Code

What is tax code K and why have I got it?