HMRC has launched a new online tool to help you understand your PAYE code. What is it and how can you use it?

Your tax code is what your employer or pension provider uses to deduct tax from your payments. When changes are required, you are sent a P2 coding notice showing how the code is worked out. The notice can be confusing, and cause worry. HMRC has launched a new online tool to help you. You need a few details to use it, namely your:

  • tax code
  • annual income, before any deductions
  • company benefits details (if any)
  • State Pension amount (if any).

In some circumstances, you may find you need to change your code, and the tool directs you to the relevant service to do this.

This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit or call 01233 653500.