T means HMRC needs to review your personal allowance calculation. It is used when income over £100,000 tapers your allowance or when other adjustments apply.
Sixty per cent. That is the effective marginal tax rate lurking inside the most common reason for a T tax code: the Personal Allowance taper between £100,000 and £125,140. The T suffix replaces the standard L on your tax code when HMRC determines that additional calculations are needed to work out your correct Personal Allowance. It is not an emergency code, and it is not an error. It means your tax situation is more complex than the standard 1257L code can handle.
The L suffix on a tax code means straightforward: you are entitled to the standard Personal Allowance with no complications. The T suffix means at least one additional factor is affecting your allowance calculation. The number before the T still indicates your adjusted allowance (multiply by 10 and add 9 to get the approximate figure), but HMRC wants to flag that the calculation is not standard.
Income over £100,000 (Personal Allowance taper). This is the most common trigger. Once your adjusted net income exceeds £100,000, HMRC reduces your Personal Allowance by £1 for every £2 above the threshold. At £105,000, your allowance drops by £2,500 to £10,070 (code 1007T). At £112,570, it drops to £6,285 (code 628T). At £125,140, it reaches zero (code 0T).
Marriage Allowance adjustments in unusual situations. While standard Marriage Allowance recipients get an M or N suffix, certain edge cases where the allowance interacts with other adjustments may result in a T code.
Underpaid tax recovery. If HMRC is recovering underpaid tax from a previous year through your code, the adjustment may push your code into T territory, particularly when combined with other factors.
Other HMRC-initiated reviews. Occasionally, HMRC applies T when they are actively reviewing your tax affairs and want to prevent automatic adjustments while the review is ongoing.
The taper is the single most important concept behind the T code. Understanding it properly can save you thousands.
For 2025/26, the standard Personal Allowance is £12,570. Once your adjusted net income exceeds £100,000, HMRC claws back the allowance at a rate of £1 for every £2 above the threshold. This creates a taper zone between £100,000 and £125,140 where:
| Adjusted net income | Personal Allowance remaining | Tax code (approximate) |
|---|---|---|
| £100,000 | £12,570 | 1257L (or 1257T) |
| £105,000 | £10,070 | 1007T |
| £110,000 | £7,570 | 757T |
| £115,000 | £5,070 | 507T |
| £120,000 | £2,570 | 257T |
| £125,140 | £0 | 0T |
The maths behind the 60% rate: Earn £1 above £100,000. You pay 40% income tax on that £1 (40p). You also lose 50p of Personal Allowance, which was sheltering income from 40% tax, costing you an additional 20p. Total tax on that £1: 60p.
David earns £112,000 as a senior manager. His adjusted net income triggers the Personal Allowance taper.
Step 1: Calculate remaining Personal Allowance
Step 2: Calculate Income Tax
| Band | Amount | Rate | Tax |
|---|---|---|---|
| Personal Allowance | £6,570 | 0% | £0 |
| Basic rate (£6,571-£50,270) | £43,700 | 20% | £8,740 |
| Higher rate (£50,271-£112,000) | £61,730 | 40% | £24,692 |
| Total Income Tax | £33,432 |
What David would pay with the full £12,570 allowance:
| Band | Amount | Rate | Tax |
|---|---|---|---|
| Personal Allowance | £12,570 | 0% | £0 |
| Basic rate (£12,571-£50,270) | £37,700 | 20% | £7,540 |
| Higher rate (£50,271-£112,000) | £61,730 | 40% | £24,692 |
| Total Income Tax | £32,232 |
Cost of the taper: £33,432 - £32,232 = £1,200. That is the price of the £6,000 lost allowance, taxed at the 40% higher rate. On that £12,000 slice of income (from £100,000 to £112,000), David's effective rate is 60%.
Pension contributions are the most powerful tool for escaping the 60% taper zone. A contribution reduces your adjusted net income, which can restore some or all of your Personal Allowance.
Example: David earns £112,000. He contributes £12,000 to a pension. His adjusted net income drops to £100,000. His full Personal Allowance is restored. The pension contribution effectively saved him:
For every £2 of pension contributions within the taper zone, you save £1 in lost allowance plus the standard 40% relief. This makes pension contributions in the £100,000-£125,140 band extraordinarily efficient.
| Income before pension | Pension contribution | Adjusted income | PA restored | Total tax saving |
|---|---|---|---|---|
| £105,000 | £5,000 | £100,000 | £2,500 | £3,000 |
| £112,000 | £12,000 | £100,000 | £6,000 | £7,200 |
| £125,140 | £25,140 | £100,000 | £12,570 | £15,084 |
| £130,000 | £30,000 | £100,000 | £12,570 | £17,028 |
Note: The annual pension allowance for 2025/26 is £60,000, so contributions up to this level are permitted (subject to having sufficient earnings). Unused allowance can be carried forward from the previous three tax years.
In terms of how PAYE works day-to-day, T and L function identically. Your employer uses the number in the code to calculate your tax-free pay for each period and deducts tax on the rest. The letter does not change the calculation.
The difference is administrative:
| Feature | L suffix | T suffix |
|---|---|---|
| Automatic uplift when PA changes | Yes | No |
| HMRC review flag | No | Yes |
| Standard allowance assumed | Yes | Not necessarily |
| Common for income under £100k | Yes | Rare |
| Common for income over £100k | Rare | Yes |
Key point: When the government changes the Personal Allowance (as they might in a Budget), codes ending in L are automatically updated. Codes ending in T are not, because HMRC needs to manually review the calculation. This means T code holders may need to contact HMRC to ensure their code is updated.
If your adjustments are so large that they exceed your Personal Allowance entirely, HMRC switches from a number-plus-T code to a K code. The K code adds to your taxable income rather than subtracting from it.
For example, if you have £15,000 in benefits in kind (company car, medical insurance) and your Personal Allowance has been fully tapered away, HMRC cannot subtract £15,000 from a zero allowance. Instead, it assigns K1500, which adds £15,000 to your taxable pay.
The transition from T to K typically happens when you have both a high income (above £125,140, eliminating the Personal Allowance) and significant benefits in kind or underpaid tax being recovered through your code.
Not necessarily. If the reason for the T code is ongoing, such as consistently earning above £100,000, the code will persist from year to year. HMRC reviews it annually when they issue your P2 coding notice (usually in January or February for the upcoming tax year).
If your circumstances change, for example you take a pay cut, increase pension contributions, or retire, contact HMRC to request a review. They will reassess and potentially switch you back to an L code.
If the code does not match your calculation, call HMRC on 0300 200 3300 or update your income estimate online.
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