6 Reasons Why Your Tax Code Changed From 1250L to 1185L
why your UK tax code changed from 1250L to 1185L? Discover expert answers, real-life examples, and a step-by-step guide to correcting tax code errors.
Kumar
Tax content writer and SEO executive at Zipptax
If you’re seeing a change from 1250L to 1185L, it means your tax-free personal allowance has decreased, and you may now pay more tax. Reasons can include underpaid tax, benefits adjustments, job changes, or HMRC updates.
Top 6 Reasons Why Your Tax Code Changed From 1250L to 1185L
Understanding why your tax code has shifted—especially from something like 1250L to 1185L—can help you stay in control of your finances. Here are six common reasons why HMRC might have updated your tax code:
1. Company Benefits
If you receive benefits from your employer—such as a company car, private medical insurance, or subsidised accommodation—these are considered taxable benefits-in-kind. HMRC reduces your personal allowance to account for the value of these perks, which can result in a lower tax code.
2. Underpaid Tax
If you didn’t pay enough tax in a previous year, HMRC might update your current tax code to collect the difference. Instead of issuing a one-time bill, they spread the repayment across the tax year by reducing your allowance—hence a change like 1250L to 1185L.
3. Job Changes
Starting a new job or switching employers can trigger a temporary or permanent tax code update. If your new employer doesn’t have your full tax history, HMRC may assign an emergency tax code or recalculate your allowance based on estimated income.
4. Marriage Allowance Adjustments
If you or your spouse opt into or out of the Marriage Allowance, your tax code will reflect the change. For example, if you transfer part of your allowance to your partner, your code may be reduced to account for the lower threshold.
5. State Benefits
Receiving taxable state benefits, such as the State Pension or Jobseeker’s Allowance, can affect your tax-free allowance. HMRC may reduce your code to ensure these benefits are taxed correctly, especially if they’re not taxed at source.
6. Additional Income
If you’ve started earning extra income—from freelance work, rental properties, or a second job—HMRC may adjust your tax code to reflect the added earnings. This helps ensure you’re paying the right amount of tax across all income sources.
What Is a Tax Code?
A UK tax code is issued by HMRC to tell employers or pension providers how much of your income should be tax-free before Income Tax kicks in. The number in your tax code reflects your Personal Allowance—that’s the portion of your income you’re allowed to earn without paying Income Tax during the tax year.
For instance, a tax code of 1250L indicates that you can earn up to £12,500 without paying any tax. This was the standard code during the 2019–2020 tax year. If your code changes to 1185L, that figure drops to £11,850—meaning you’ll pay tax on a greater portion of your earnings.
The letter “L” at the end of both codes indicates that you're eligible for the standard tax-free Personal Allowance, with no special tax circumstances such as age-related or blind person’s allowance.
A shift from 1250L to 1185L typically reflects a reduction in your Personal Allowance, possibly due to things like taxable workplace benefits, a change in income, or HMRC adjusting your code to recover underpaid tax from a previous year. It doesn’t always signal an error—but it’s important to understand why the change happened to ensure you're being taxed correctly.
What Does 1185L Mean?
The tax code 1185L is a UK income tax code that indicates your tax-free personal allowance is £11,850 for the tax year. This means you can earn up to £11,850 before you start paying Income Tax. The number “1185” represents the allowance, calculated by multiplying it by 10.
If your tax code has changed to 1185L, it typically reflects a reduction in your personal allowance compared to a previous code like 1250L. This could be due to HMRC adjusting your allowance based on factors such as taxable benefits, underpaid tax from earlier years, or changes in your income profile.
In essence, 1185L means you’re still eligible for the standard allowance, but at a lower threshold, which results in a slightly higher portion of your income being taxed.
Real-Life Example
Sarah moved from a retail job to a logistics role and received a company van. HMRC adjusted her code to 1185L to reflect the taxable benefit.
How to Check and Fix Your Tax Code
If your tax code has changed unexpectedly—such as from 1250L to 1185L—it’s important to verify whether the update is accurate. HMRC may adjust your code based on new income, benefits, or previous underpayments, but errors can happen. Here’s how to check and correct it:
Step 1: Visit the HMRC Tax Code Checker
Go to the official HMRC tax code checker. This tool helps you understand how your tax code was calculated and whether it reflects your current circumstances.
Step 2: Sign In with Your Government Gateway ID
Sign in with your Government Gateway credentials to view your personal tax details. If you don't have an account yet, you can easily create one during the process.Step 3: Review Your Coding Notice (P2)
Once logged in, locate your P2 coding notice—this document outlines how HMRC calculated your tax code. Check for any listed deductions, benefits, or income sources that may have triggered the change.
Step 4: Take Action If the Code Is Incorrect
If something doesn’t look right—such as outdated benefits or missing income—you can:
- Contact HMRC directly via phone or online to request a correction.
- Use the online service to report changes in income or benefits.
- Ask a tax specialist like Zipp Tax to review your code and liaise with HMRC on your behalf.
Fixing your tax code promptly ensures you’re not overpaying or underpaying tax throughout the year.
Backdating & Refunds
If your tax code was changed incorrectly—such as being moved from 1250L to 1185L without valid justification—you may have overpaid tax. In such cases, you could be eligible for a tax refund, and HMRC allows for backdated corrections to ensure you're not left out of pocket.
When Refunds Apply
Refunds typically apply when:
- HMRC used outdated or incorrect information to adjust your tax code.
- Benefits or income were wrongly reported or no longer apply.
- You were placed on an emergency tax code and it wasn’t corrected in time.
How Zipp Tax Can Help
Zipp Tax specializes in helping individuals reclaim overpaid tax by:
- Reviewing your tax history to identify discrepancies or unjustified deductions.
- Filing correction requests with HMRC to amend your tax code and trigger a refund.
- Maximizing your refund by identifying any allowable deductions you may have missed, such as work-related expenses or benefit adjustments.
Acting quickly ensures you don’t miss out on eligible refunds, especially since HMRC typically allows claims for up to four previous tax years.
Historical Context of UK Tax Codes
Tax codes in the UK are updated regularly to reflect changes in personal allowances and government policy. For example, the 1250L tax code was implemented for the 2019–2020 tax year, representing a £12,500 tax-free allowance. Before that, 1185L was used in the 2018–2019 tax year to indicate a slightly lower allowance of £11,850.
If your current tax code reverts to 1185L, it doesn’t necessarily mean a mistake. HMRC might be adjusting for underpaid tax, applying benefit-in-kind deductions, or revising previous allowances based on updated income data. These changes reflect policy shifts and personal circumstances—understanding the historical context helps you assess whether HMRC’s adjustment makes sense for your situation.
Impact on Different Income Levels
A change in tax code may feel minor, but even a small reduction in your personal allowance can reduce your net pay. For basic-rate taxpayers, losing £650 in tax-free income typically means paying an extra £130 annually in tax. For higher earners, the impact is greater due to the 40% marginal rate.
This difference accumulates over months and could result in unexpected deductions. It’s crucial to assess how the code change affects your salary so you aren’t caught off guard, especially if you work overtime or receive bonuses that push your tax band.
Employer and Payroll Influence
Employers share real-time payroll data with HMRC—including salary, benefits, and employment changes. If they incorrectly report items such as company cars, start dates, or taxable perks, HMRC may assign a lower tax code to recover perceived shortfalls.
Something as simple as forgetting to file a P45 when switching jobs can trigger automatic recalculations. A mismatch in benefits or duplicated employment records might reduce your personal allowance too. That’s why regular communication with your payroll department is key—what they submit directly affects your take-home pay.
Public Feedback on HMRC Notices
Many employees who receive tax code notices from HMRC find them vague or difficult to interpret. Phrases like “based on your estimated income” or “adjustment for benefit-in-kind” appear without detailed explanations. While these codes are designed to reflect your actual tax situation, the lack of clarity often causes confusion.
Tax specialists frequently hear from clients who’ve received letters with little context. One recent example involved a worker who switched employers mid-year, received a new tax code notice, and saw their monthly income fall. Only after investigating did they learn HMRC had made assumptions about their new salary based on previous job data.
Advanced Tax Scenarios and Adjustments
Beyond basic reasons, there are more technical factors that influence your tax code. One example is the Marriage Allowance transfer. If you or your spouse apply for this benefit, your personal allowance will be adjusted and reflected in your code. Similarly, employees with benefits such as private medical insurance or fuel allowances often see deductions factored into their tax coding.
Some adjustments come from previous years—HMRC may attempt to recover underpaid tax by issuing a lower code. These changes can be appealed or adjusted if the data is inaccurate. You’re entitled to contact HMRC or seek help from professionals like Zipp Tax to confirm that your code matches your current financial reality.
Want me to extend this with even deeper commentary, or stitch it seamlessly into your existing article? I can also prep it for publishing or add a flowchart walkthrough of the P2 notice review process. Let me know what format you're working in next.
Still Confused? Let Zipp Tax Help
Our team at Zipp Tax simplifies tax code corrections and ensures your income isn’t unfairly taxed. We’ll handle HMRC, calculate entitlements, and ensure you get the refund you deserve.
Frequently Asked Questions
1. Why did my UK tax code change from 1250L to 1185L? Your tax code likely changed due to a reduction in your personal allowance, possibly triggered by underpaid tax, workplace benefits, or HMRC updating your income details.
2. What does tax code 1185L mean in the UK? It means HMRC now allows you to earn only £11,850 tax-free, instead of the standard £12,500. This change may increase how much tax you pay unless corrected.
3. Is the change to 1185L a mistake by HMRC? Not always. Sometimes the change reflects actual tax adjustments, but it’s worth checking your coding notice (P2) or contacting HMRC if unsure.
4. How do I fix an incorrect tax code like 1185L? Log into your personal tax account on GOV.UK, check your income and benefits breakdown, and request a correction if there’s a discrepancy. Zipp Tax also offers direct support.
5. Can employment benefits affect my tax code? Yes, receiving company benefits like cars, insurance, or housing can reduce your tax-free allowance and trigger code changes.
6. Will a lower tax code affect my monthly salary? Definitely. A lower code like 1185L means you’ll pay tax on a larger portion of your earnings, reducing your net take-home pay.
7. Can I get a tax refund if 1250L was correct and 1185L was wrong? Yes. If HMRC made an error or your employer misreported earnings, you can request backdated corrections and potentially receive a refund.
8. What steps should I take if my tax code changed unexpectedly? Review your P2 coding notice, log into your tax account, cross-check income and benefits, then reach out to HMRC or Zipp Tax for a full audit.
9. Why does my tax code start with numbers like 1250 or 1185? The number represents your yearly tax-free personal allowance. Multiply it by 10 to find the exact amount (£12,500 or £11,850 respectively).
10. Can multiple jobs or pensions affect my tax code? Yes. Having more than one source of income may cause HMRC to adjust your allowance and assign a different code for each employer or pension provider.