February 21, 2016 What is the Tax Code for 16/17 First of all, what is a tax code? A tax code is used by an employer in order to calculate how much tax should be deducted from your salary. When you are in employment your tax is deducted at source under PAYE (Pay As You Earn). Your tax code is also used by pension providers who will also deduct tax at source. Tax Code 16/17 Your tax code will be made up of a series of numbers and usually a letter. The number element tells you how much tax free income you have. The standard personal allowance for the 16/17 tax year is £11,000 – this means that your first £11,000 of income is tax free. The standard tax code for 16/17 is 1100L – the 1100 refers to the £11,000 of tax free income The ‘L’ refers to the fact that you are entitled to the standard tax free personal allowance. You can see a full list of what the different letters mean on Gov.UK here. Some examples of other common tax codes are: BR – this means that basic rate 20% tax will be deducted on your income – this is usually issued to people that have second employments M & N – these letters refer to the marriage allowance Dividend allowance The new dividend allowance which comes in on 6th April 2016 is causing HMRC to issue some people with lower tax codes as they are attempting to capture the tax upfront which they believe will arise from dividends in the 16/17 tax year. If this has affected you then you can call HMRC to ask them to adjust your tax code to remove any estimated tax on your dividends as you will account for this through your personal tax return for 16/17. HMRC can be contacted through the self assessment helpline here or you can fill in an online PAYE tax code query form here.