HMRC P2 tax code notice explained

HMRC is telling you, and your employer, which tax code to use. A wrong code means paying too much or too little tax all year.

Last checked: 18 October 2026 · Written by Ivan S., finance professional

What it is Your new tax code and how HMRC worked it out

Deadline None, but fix errors fast so they don't build up

Who fixes it HMRC, not your employer. You have to contact them

How to read your code

The number is your tax-free pay with the last digit removed. So 1257L means £12,570 tax-free, the standard personal allowance.

If HMRC is collecting tax you underpaid in an earlier year, or taxing a benefit like a company car, the number will be lower. A K code means you owe more than your allowance, so tax is added to your pay. Codes starting with S are for Scottish taxpayers and C for Welsh.

What to check

Your details and the tax year. You can get two notices on the same day for different years.
Each job or pension. If you have two, each needs its own code. Two full allowances means you'll underpay and get a bill later.
The calculation box. Check every deduction, especially estimated savings interest, benefits and any underpayment being collected.
Other income HMRC doesn't know about. If you have side income, like self-employment or rent, tell HMRC. They may adjust your code or ask you to file a tax return.

If it's wrong

Your employer can't change your code; only HMRC can. The fastest route is the "Check your Income Tax" service in your personal tax account or the HMRC app. Once HMRC updates it, any tax you overpaid is normally refunded through your pay.

Can't make sense of the calculation?

Upload your P2 and we'll explain each line and whether your code looks right.

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This is general information, not tax advice. Letter Sorted is independent and not affiliated with HMRC.