Introduction to Income Tax and NICs Pay As You Earn and income tax
5.7.2 Code suffixes
The majority of tax codes will have a suffix. Each suffix signifies some aspect of the employees’ tax status.
L
— standard Personal Allowance
•
T
— temporary
•
M — recipient of a Transferable Tax Allowance
•
N — transferor of a Transferable Tax Allowance
•
Suffix T codes are not automatically updated by ‘blanket’ notice. Employers must therefore await individual coding notices each year.
Suffix M and N codes were introduced from April 2015 for the Marriage Allowance (see ‘ Marriage Allowance ’ above).
A single person’s tax code will tend to be 1257L for 2023-24. This is also the basis for the ‘emergency tax code’ (with Week 1 / Month 1 added).
5.7.3 Tax code prefixes
Tax code prefixes indicate a variation from the standard tax calculation method.
D0
— higher rate tax (40%) applies (rUK)
•
D1
— additional rate tax (45%) applies (rUK)
•
K — negative pay adjustment (no tax-free pay, but additional pay)
•
S
— Scottish rate taxpayer
•
C
— Welsh rate taxpayer
•
• SD0 — intermediate rate tax (21%) applies (Scotland)
• SD1 — higher rate tax (42%) applies (Scotland)
• SD2 — top rate tax (47%) applies (Scotland)
The S prefix for Scottish rate taxpayers was introduced in April 2016 to identify taxpayers who are subject to the Scottish income tax variations. Similarly, the C prefix was introduced in April 2019 to identify Welsh taxpayers. HMRC identifies individuals with Scottish or Welsh taxpayer status, which it does primarily by using the individual’s main place of residence (it does not depend on the employer’s location). Scottish or Welsh taxpayer status applies for the whole tax year and it is the employee’s responsibility to inform HMRC of any changes in their home address. The S and C prefixes can be used with any tax code, including those with a K prefix. They must only be used when notified to do so by HMRC or when the tax code on a new starter’s P45 already includes this prefix. On leaving employment,
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