HMRC reaching out to inform you your tax code is changing can sometimes be good news, especially if it’s because your Personal Allowance (the tax free amount you can earn in a tax year) is increasing – so you’ll pay less tax and take more money home.
That’s exactly what the 1263L tax code is – a nice little tax-saver. We’ll discuss exactly how much the 1263L tax code saves you, along with who qualifies for it.
How do I find my tax code?
Before we get into what the 1263L tax code is, it’s good to know where you can find your tax code so you can ensure you have the correct one! Your tax code tells your employer how much income tax to deduct from your wages, so you can find it by:
- Checking your pay slip
- Logging into your personal HMRC tax account
- Going to your HMRC app
- Checking your P60 or P45
If you don’t have any access to these documents, you can call HMRC (you will need your National Insurance Number for this).
How often should I check my tax code?
We’d recommend checking your tax code regularly, especially if you have a new employer or you’re newly employed after self-employment, when it’s common to be put on an emergency tax code. This could see you taxed 20% on all your income, without the benefit of your tax-free Personal Allowance, until HMRC have the correct details about how much you earn and how much tax you’ve paid in the tax year so far.
Our online tax calculator will help you estimate how much tax you should be paying on your wages.
What does it mean if my tax code is 1263L?
As you’ve probably guessed from the intro, having a 1263L tax code is actually a good thing. This means you don’t owe any additional taxes to HMRC (phew), and in fact it’s quite the opposite. Your tax-free Personal Allowance has increased.
The standard tax code you’re probably familiar with is 1257L, which is based on the tax-free personal allowance of £12,570. This refers to the fact you can earn up to £12,570 in a tax year before starting to pay income tax on your earnings.
The 1263L tax code is similar to 1257L, but it means you’ll earn £12,630 before you begin to pay income tax. Saving you approximately £60!
Why has my tax code been changed to 1263L?
Your tax code will normally change to 1263L if you’re eligible for HMRC’s flat rate expenses for the costs and maintenance of your work uniform. It means you’re receiving tax relief (so you’ll pay less tax) in order to cover the upkeep of the uniform you must wear for work.
If that isn’t the case, it’s usually because you’re entitled to some other type of allowable expense or deduction.
How do I apply for a 1263L tax code?
In most cases you’ll apply to HMRC via a P87 form for ‘washing of uniform allowance’. Once your application has been approved, you should receive confirmation from HMRC your tax code is now changing.
You don’t have to apply for this each year, and your tax code should remain the same unless you reach out to HMRC and tell them you no longer need any allowable expenses. They can also change your tax code if they have reason to believe you’re no longer in need of any allowances (for example, because you started a new job with a different employer).
How can I change my 1263L tax code?
Simply contact HMRC online to change your tax code, or give them a call if your circumstances change. It’s important to keep HMRC in the loop when things do change, so you pay the right taxes!
Need help figuring out your tax code? We can help! Talk to one of the team on 020 3355 4047, or get an instant quote today.
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