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Tax codes

Journalist: Emma Lunn, Freelance

ended 02. July 2025

I am writing an article for Saga about tax codes and need some expert comment answering the following:

What is an obvious sign that someone's tax code is wrong? (i.e. emergency tax codes)

Why might someone's tax code be wrong? (i.e for over 50s it might be due to retiring or getting income from an additional pension)

How can you get an incorrect tax code corrected?

As it's Saga, comments need to be aimed at over 50s, some of which will still be working, while others will be retired. 

3 responses from the Newspage community

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Editor
Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
Tax codes signify our complex tax system. HMRC frequently get things wrong, so it's important to check, so you're not overtaxed. With many ways to access your private pension, including adhoc or lump sums, your tax code can be adjusted if they need to offset more or less tax from the current or previous years. If you see an 'M1' tax codes, it means youre being 'emergency taxed'. It means that HMRC don't really know your tax code yet so they've put you on the highest to ensure they aren't out of pocket. Give them a call and see if you can do anything to rectify this- they may just need a piece of information. The help line is actually very good and the operators know their stuff. You may see other codes on your pension payslip too. BR means you're paying basic rate tax on all of this income, maybe becuase you're working and have other sources of income. M or N are signs you are using the marriage allowance and T is when HMRC need more info. L means you're getting the standard allowance.
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Simon Thomas
Managing Director and Chartered Accountant at Ridgefield Consulting
“One of the most obvious signs your tax code is wrong is a sudden drop in take-home pay without any change in income. Another red flag is an emergency tax code like 1257L W1, M1, or X, this means you are only getting the basic personal allowance and may be overpaying tax. This often happens after retiring, changing jobs, or starting a new pension. Why might a tax code be wrong?v “For over-50s, it's often due to receiving income from multiple sources, state benefits, private pensions, or part-time work. HMRC may not have up-to-date info, especially if you've retired mid-year or started drawing a pension.”vHow can you fix it? “Log in to your HMRC Personal Tax Account or call them. Have details of all income and pensions ready. Once corrected, your employer or pension provider will apply the new code.”
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Chloe Mount
Director at Tunstall Accounting
Tax codes can be confusing but they’re vital to getting your tax right. For over-50s with income from pensions, part-time work or the State Pension, errors are common, especially if you’ve recently retired or started drawing from a pension. One sign your code may be wrong is a sudden change in your income or receiving an unexpected tax bill or refund. Flexible pension withdrawals, like lump sums, can also trigger mid-year tax code changes. Even if your payslip doesn’t show an obvious emergency code like M1 or BR, your code could still be incorrect. It’s worth checking. You can view your tax code through your HMRC Personal Tax Account or on your payslip or pension statement. If something seems off, contact HMRC, either by phone or online. They may just need a small update and your next payment will reflect the correction. Taking five minutes to check can save you money and stress.