Why does my tax code change?

Your tax code number is determined by your tax office and is based on your taxable allowances. The composition of those allowances is confidential between you and the tax office, but your employer uses the code number to calculate tax due from tax tables.

If a tax payer were entitled only to an annual personal allowance of, say, £4,615 the code number would be 461, the last number being dropped.

Code numbers usually include a letter, which merely indicates to the employer how tax should be adjusted following any changes announced in the budget.

Changes in tax code numbers will, therefore, reflect changes in your personal circumstances.