Tax codes are issued by HMRC each tax year and reflect your personal tax-free allowance. For the 2015/16 tax year the new tax code for most people is 1060L.
Tax Code 1060L
Tax codes usually consist of a 4-digit number and a letter. These reflect your Personal Allowance for the relevant tax year, divided by 10, followed by a letter giving your employer an additional information about your personal circumstances. These are important details when calculating the correct amount of tax to be paid.
For 15/16 the tax code for the majority of people born after 5 April 1948 is 1060L, based on the £10,600 tax-free Personal Allowance. In this case, “L” means that you’re entitled to the normal tax-free amount. Sometimes your situation may be different, therefore your code would vary too. Find out more about the different tax scenarios in our detailed 2015/16 tax codes guide.
Where is my tax code printed?
There are several places where you can find your code, including your payslips, your P45 and P60 forms, and on HMRC PAYE coding notice letters. If you’re registered for the HMRC’s Self Assessment online service, then your tax code may be found online.
You may also have multiple tax codes, depending on the number of employers you have. The Office of National Statistics sited by the Telegraph reveals that over 1.2 million UK workers have a secondary source of income, whereas industry sources suggest that this number is at least 3 million. If you have a second job, or a job and a pension, then your will have two tax codes.
Read more how a second job would affect your tax position here.
When does it change?
Tax codes increase at the beginning of each tax year, i.e. 6 April to reflect the new Personal Allowance. It may also be changed during the year if HMRC is notified about changes in your income or benefits situation. For example, if you start or stop receiving state pension, benefits in kind, or rental income, and notify HMRC, you will receive a notice with a new tax code.
What if my code is wrong?
If you think your tax code is incorrect you should contact HMRC to reflect the changes. Very often that would mean you’re currently paying too much tax because your circumstances have changed and your records were not updated. Contact HMRC on 0300 200 3300 and explain your changes so that they can adjust your tax code and calculate the right amount of tax.
Finally, if you still have a question on the new 2015/16 tax codes, read this guide.