What is a K tax code?

Most tax codes give you a tax-free allowance. A K code does the opposite: your deductions — usually taxable benefits like a company car or medical cover, or an underpayment HMRC is collecting — are larger than your allowance, so the difference is added to your taxable pay instead of being tax-free.

To read it, add a zero: K475 means roughly £4,750 is added to your taxable income across the year. That is why a K code takes more tax than a standard code on the same salary.

There is a safeguard: the extra tax collected through a K code can't be more than half of the payment it's applied to in any pay period. If you ever see more than that taken, something is wrong.

If you don't recognise the benefit or underpayment behind your K code, check your P2 coding notice in your Personal Tax Account — and if a benefit has ended, tell HMRC so your code can go back up.