X Tax Code Explained and How to Fix It Fast
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If you’ve checked your payslip and spotted an X at the end of your tax code, HMRC is essentially saying, “We don’t have enough information to tax you properly yet.” That’s it. No drama, but it does mean your tax is being calculated in a way that often results in overpaying.
In this guide, we break down exactly what the X tax code means, why you’re on it, how much income tax you owe, and how to fix it quickly. This explanation is written by MMBA Accountants, using real UK data and real client scenarios, so you know you’re getting practical answers, not generic theory.
Contact MMBA Accountants today for all assistance related to an X Code on Tax, including cryptocurrency taxes.
Table of Content:
What Is the X Tax Code? (The Quick, Clear Answer)
he X tax code means a temporary emergency tax code that tells your employer how much tax you pay on a non-cumulative tax code basis. That means:
Your tax circumstances are calculated only for that pay period
HMRC doesn’t apply your annual tax-free personal allowance (£12,570)
Any unused allowance from earlier months doesn’t carry over
You may also be eligible for the trading allowance, which affects your tax calculation if you are self-employed or earn income from casual work.
In other words, if your most common tax code would reduce how much tax you pay across the year, the X code ignores all of that. It’s a “start fresh every month” approach, which is rarely in your favour.
For example:
Normal tax code includes: 1257L → £0 tax for the first £1,047/month
Emergency X code: tax from pound one
If you’re letting out a room in your home, you may also want to consider the Rent a Room Scheme in the UK, which can provide tax-free allowances.
This is why so many people on the X code end up overpaying.
Why HMRC Gives You the X Tax Code
HMRC uses emergency tax codes when it can’t confirm your income history. The X code appears most often when:
started a new job, and your employer hasn’t received your P45
moved from self-employed to PAYE
begun receiving a State job or Pension
started a new job or switched from a previous job to get benefits (car, fuel, medical insurance, etc.)
If HMRC doesn’t know your full tax picture, it plays it safe and puts you on an emergency tax code until things are clarified.
How X Differs From Other Emergency Tax Codes (W1 or M1, BR, 0T)
Your X code isn’t the only one HMRC uses when information is missing. Here’s how they compare:
| Code | Tax code Means | When It’s Used | Typical Outcome |
| 1257LX | Non-cumulative; no annual allowance applied | Missing info, new job, no P45 | Overpayment likely |
| 1257L W1 M1 | Week 1 / Month 1 basis | New starter checklist used instead of P45 | Temporary overpayment |
| BR (tax code CBR, tax code SBR) | All income is taxed at 20% | Second job or pension from more than one job; no tax-free allowance | Overpayment unless the income is a genuine second income |
| 0T | No personal allowance applied | Income details are missing or exceeded allowances | Significant overpayment |
| S / C pre-fixed | Scottish rate / Welsh taxpayer | Based on postcode, basic rate & residency, and job or pension provider | Regional tax differences |
How the X Tax Code Affects Your Take-Home Pay
The biggest impact is simple: you lose the benefit of your cumulative code and tax code-free personal allowance.
Real Example (Income Tax UK 2024/25):
Salary: £30,000/year (£2,500/month)
Correct code (1257L):
→ No tax in early months until allowance usedX code (1257LX):
→ HMRC taxes you each month as if you’re earning for the first time
→ £150–£350 more tax deducted in the early months
Breaking Down Numbers and Letters in Your Tax
Every part of your tax code tells HMRC something about your situation.
1257 = £12,570 tax-free personal allowance
0 = no personal allowance (used for tax code BR/0T codes)
K tax codes mean your taxable benefits exceed your total personal allowance
L Letter – Standard personal allowance
M/N – Marriage Allowance (transferred between allowances to your partner or partner’s personal allowance)
K – Underpaid tax or benefits exceeding your allowance
S – Scottish taxpayer
C – Welsh taxpayer
BR/DO/D1 – Entire income taxed at the additional (20% / 40% / 45%)
X – Non-cumulative emergency basis
If you’re on the Tax Code (company benefits, state pension, being self-employed, or having started a new job)
Check your pay slip
Look for codes like:
1257LX
BRX
0TX
S1257LX (Scottish)
CBRX (Welsh)
Ensure your employer has the right:
NI number
start date
pay tax period
employer PAYE coding notice reference
Give your employer the correct documents
Make sure they have your:
P45
completed HMRC starter checklist
details of other job or pension income (if working on more than one job)
Update HMRC directly (fastest method)
Log in to your Personal Tax Account and Update:
job changes
Additional rate or intermediate rate on income (apart from the basic rate)
benefits-in-kind
Job or pension provider income
allowance status
HMRC usually issues a corrected code within 2–10 working days.
Step 4: Monitor your next payslip
Your employer receives an updated P6 notice.
Any overpaid tax is refunded:in your next pay tax cycle, or
via HMRC at year-end
MMBA Case Studies: Real Examples
Construction Worker, London
A client changed mid-month without a P45. He was placed on 1257LX and overpaid £487 in two months. We corrected his code on the basic rate while recovering tax in the full amount within the same tax year, as compared to none in the previous year.
Retired Teacher with Part-Time Job, Manchester
Receiving Pension + tutoring income. HMRC incorrectly applied BRX to her particular employment income. After correcting her job or pension allocations, she received a £780 rebate.
Employee With Company Car, Birmingham
The employer submitted benefit details late. HMRC assigned 0TX, significantly increasing his deductions. We adjusted the benefit valuation and restored the correct code, reducing the monthly tax by £110.
How to Change Your Tax Code If HMRC Doesn’t Fix It Automatically
Sometimes HMRC figures require manual confirmation. You should contact HMRC if:
Code seems too high or too low
Receiving Company benefits, but the tax code is wrong
Your postcode is wrong, tax code (affects Scottish/Welsh codes)
Duplicate jobs appear in HMRC’s system (in case of more than one job)
Contact HMRC
Phone: 0300 200 3300
Backdating Rules
HMRC can go back:
4 years for normal corrections
6 years for careless mistakes
20 years if they think it was deliberate or a higher rate
Another reason to correct issues early.
Tax Rebates: How X Code Overpayments Are Refunded
You may qualify for a rebate if:
You were taxed incorrectly for several months
Your code changed late in the year
HMRC allocated allowances, and the tax code is wrong
The benefits were miscalculated
Most refunds arrive within 30 days, but complex cases (multiple jobs or pension providers, rental income) may require a Self Assessment tax return.
How MMBA Helps
Incorrect tax codes are one of the most common issues we resolve for clients across the UK. Whether you’re on the X, BR, 0T, or a confusing benefit-adjusted code, we can:
correct your HMRC records
recover paid weekly or paid monthly tax
Make sure to think your tax code stays correct year-round
Check all coding notices
Review employer submissions
Identify benefit-in-kind discrepancies
File rebate claims
Handle disputes with HMRC
Ensure your code is correct going forward
Clients often recover hundreds, sometimes thousands, of pounds after being on the X code.
How To Prevent Being Put on the Tax Code Again
- Always give your new employer your P45 immediately
- Complete the starter checklist honestly
- Report job changes to HMRC tax refund as soon as they happen
- Update HMRC with benefit or income changes
- Check your payslip monthly
A 30-second check can prevent a 6-month headache.
Frequently Asked Questions About the Tax Code
Why is my tax code 1257LX?
HMRC doesn’t have enough information about your income yet, so it’s taxing you on a non-cumulative basis at an additional rate (usually a higher rate), which can be rebated later.
Will I get a refund automatically?
Often yes, but not always. If the numbers and letters look wrong, it’s faster to update HMRC directly or ask MMBA to review it.
How long does it take to fix a tax code?
Usually, 2 to 10 working days once HMRC receives the correct details, taxed at the additional code.
Is the X code the same as W1/M1 or x?
They’re similar emergency codes, but X specifically flags non-cumulative or other calculations.
Why is my partner’s tax code different from mine?
Tax codes are based on individual income, benefits, job or pension, and allowance transfers, not household income.