Information about K tax codes, how to identify a K tax code, and the impact a K tax code has.
What does a K tax code look like?
K tax codes look slightly different depending on your tax residency, the tax codes will begin with the following:
‘K’ – if you a resident in England
‘CK’ – if you are a resident in Wales
‘SK’ – if you are a resident in Scotland
What does a K tax code mean?
Whilst the tax codes look slightly different depending on your residency – they all mean the same thing. The number listed after the K in your tax code represents how much taxable income HMRC are adding to your annual earnings. You will not be in receipt of any tax-free allowance in the employment that holds a K tax code for you.
For example, a K100 tax code means that an additional £1000 of taxable income will be added to your annual earnings. You will just need to multiply the tax code number by 10 to work out the £GBP value that HMRC have calculated to add to your taxable income.
Why do HMRC issue K tax codes?
HMRC’s official guidance on tax codes suggest that the main reasons for a K tax code being issued is when deductions are due for company benefits or that tax is owed from previous financial years.
We’ve also heard of other reasons why HMRC may issue a K tax code:
- Your taxable income is due to surpass £100k and HMRC need to increase your weekly/monthly tax deductions to ensure that your income tax total is as close to correct by the time we reach the end of the tax year
- You’ve recently moved between jobs and HMRC think you may still be employed elsewhere (especially if the previous employer hasn’t issued your P45 yet)
- You have a huge spike in taxable earnings such as receiving a bonus
…and many more!
Should I be on a K tax code?
As every individual will have a different set of personal tax circumstances it’s impossible for us to advise on this. If you are unsure of why you have a K tax code or don’t think your tax code is correct then we always recommend to have a chat with HMRC directly. The advisor at HMRC will have a full picture of your earnings from every source and will be able to explain why they have placed you on a particular tax code. If a mistake has been made HMRC will also be able to amend your tax code to send to your employer.
We find that most tax code notices reach Nasa Umbrella within 3 working days, but this can take up to 7 days.
HMRC contact details:
- ☎️ 0300 200 3300
- NASA Umbrella Employer Reference: 034/RA30677 + Your National Insurance number