1257L Tax Code? Is It an Emergency Tax Code? What Does It Mean?

A tax code is a string of numbers that usually tells a person how they will be taxed. However, there’s no issue if you still don’t understand your tax code. Many people need help knowing how they will be charged based on a specific string of numbers. So, if you live in the UK, understanding every tax code, how you will be taxed, and getting any relief if you qualify is essential.

This guide will explain the tax code 1257L and what it means for UK persons.

Select the links in the table of contents to jump directly to specific article sections.

• Understanding 1257L Tax Code
• Is 1257L Indicate any Emergency Code?
• How would I Know If My Tax Code is Right?
• Why Your Tax Code Might Be Incorrect?
• How can you inform HMRC that your tax code is wrong?
• Wrapping Up the Code

Understanding 1257L Tax Code

1257L tax code showcases a significant personal allowance amount that HMRC has assigned to any individual. The “L” in this tax code means you are entitled to the total personal allowance, and there are no circumstances affecting your tax payment. For the 2022/2023 tax year, the allowance rate was set at £12570. That means you can earn the same amount before paying income tax.

The allowance is distributed yearly, equating to £241 per week or £1047 per month. This ensures a consistent tax deduction across each pay period. Let’s explain the 1257L tax code with an example.

Example for 1257L Tax Code
Let’s say you earn a salary of £25000 with the implementation of the 1257L tax code.

• The first £12570 will be tax-free, and you must pay tax on the other £12430.
• The basic rate tax will be 20%, meaning you must pay a leading tax of £2486 annually.
• For 2023/2024, income that exceeds 1257L, the tax rate is 20%, applicable to earned income of £12570-£50270.
• Beyond this bracket, the tax rate will exceed 40% for income earned between £50271-£125,140.
• For individuals earning above the amount of £125140, the tax rate will rise to 45%.

However, the tax rate mentioned here may be different for Scotland.

Is 1257L Indicate any Emergency Code?

No, 1257L is not an emergency code. However, if the code is followed by an alphabetic number like W1, X, or M1, it could be an emergency code. It can also be because you work as an employer after being self-employed. This is especially true when you get company benefits or a state pension.

You don’t need to worry if you receive an emergency tax code. It’s usually updated when you provide HMRC with the correct details. Moreover, HMRC will refund you if you have paid more than the tax amount.

Where is My Tax Code Mentioned?

You don’t need to be if you are confused about where to find your tax code. It is very easy to find your tax code, as it is mentioned in your

• Payslips
• HMRC App
• Letters and emails you receive from HMRC
• Personal Bank Account
• Tax code notice letter you get from HMRC

How would I Know If My Tax Code is Right?

The correct tax code means you won’t be overtaxed and will receive the right benefits. However, if you qualify for an increased personal allowance due to increased work uniform expenses, your tax code will be adjusted to 1263L.

Why Your Tax Code Might Be Incorrect?

Due to the increased volume of tax codes, it is difficult for HMRC’s system to manage them all simultaneously. The following reasons can cause tax code errors.

• Change of Your Employment Status
• Different Income Sources
• Changes in tax-deductible allowances or benefits
• This situation may lead to HMRC allocating an incorrect code

How can you inform HMRC that your tax code is wrong?

If you learn that your tax code is wrong, contact HMRC. You can do this via your Tax Account or by calling the helpline on 03002003300.

After calling, provide accurate information about your income and benefit allowances. HMRC will address your complaint and adjust your code if necessary.

Wrapping Up the Code

Tax code 1257L indicates a specific personal allowance assigned by HMRC to individuals. Understanding your tax code is essential as it determines if you have paid the correct amount of tax.

Regular checking and understanding your tax code can save you from financial divergencies. If you find any differences in your tax code, you can quickly communicate with HMRC to ensure your tax affairs are in order.

Lockhart Amin Accountants ensure that you know every tax code assigned to you and whether it can affect you. We ensure you stay compliant and are informed about the necessary codes for smart financial outgoing.