How will my employer know what tax to deduct?

Your employer will usually receive confirmation of your tax code from HM Revenue and Customs. They will not see how this has been made up. Using the tax tables provided by HMRC, your employer will use the tax code to calculate the correct tax deductions, so even if your earnings or tax code change, your employer will be able to work out the revised figure of tax due by referring to the tax tables.

If you have just started work though, and you have been unable to provide your employer with a P45, your employer may need to use the emergency tax code until HMRC confirms the correct code.

Not everyone is sent a copy of their notice of coding. If you are under 65 years of age and your only allowances are your personal allowance, you may not receive one. If you do receive a notice of coding, it will show the allowances you are due, any deductions made, and your final tax code. You can request a copy of your notice of coding from HMRC.

A full guide to understanding your notice of coding is available on the Low Incomes Tax Reform Group website.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.