UK tax codes assist both HMRC and employers to work out the correct amount of tax to be taken from your wages or pension. The numbers in code are your annual allowance tax free to the ones divided by 10 while the letters indicate tax conditions. For instance “1257L” signifies that you get full allowance of £12570. If your situation changes such as getting another job or getting benefit then HMRC might change your tax code. There is a need to validate your code in your payslip and report to HMRC with errors.
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