What Is Tax Code 1150L?

Tax Code 1150L was the standard UK tax code for most employees during the 2017/18 tax year. It indicated that you were entitled to a Personal Allowance of £11,500—meaning you could earn up to this amount without paying any Income Tax. The “L” suffix confirmed eligibility for the full standard allowance, and the code was cumulative, ensuring tax was adjusted correctly throughout the year based on total earnings. If you saw 1150L on your payslip in 2017/18, it meant your employer was deducting tax based on this allowance.

What is Tax Code 1150L and the Personal Allowance?

At its core, a tax code is a series of numbers and letters that HM Revenue and Customs (HMRC) uses to tell your employer or pension provider how much Income Tax to deduct from your wages or pension. The numbers in your tax code indicate your tax-free Personal Allowance for the year, while the letters relate to your specific tax type and work situation.

How the £11,500 Threshold Was Calculated

In the 2017/18 tax year, the 1150L tax code meant you had a tax-free Personal Allowance of £11,500. This is the amount you could earn in a tax year before needing to pay any Income Tax. For the majority of employees with a single job and an income below £32,001 a year, 1150L was the standard code.

The Personal Allowance isn't given as a lump sum; instead, it's typically distributed in equal portions throughout the year based on your payment frequency. For example, if you were paid weekly, your allowance was equivalent to approximately £221 per week. This ensures that your tax deductions are spread evenly across the year.

Cumulative Tax Impact Explained

The 1150L code also signified that it was a cumulative tax code. This is an important feature: it means that your Income Tax and tax-free pay are calculated on each payday, taking into account your total pay and Personal Allowance entitlement from the start of the tax year in April. If you returned to work after a break or started working part-way through the tax year, your tax-free personal allowance would have been building up, which could result in you paying less tax for a period.

For individuals residing in Scotland, the equivalent tax code was S1150L, where the 'S' specifically identified you as a Scottish Income Tax payer, reflecting different tax rates that apply in Scotland.

How Income Tax Was Calculated with 1150L

Once your earnings exceeded the £11,500 Personal Allowance granted by the 1150L tax code, you would then pay Income Tax on the remainder. For the 2017/18 tax year, the general UK tax rates above the Personal Allowance were as follows:

Basic Rate: 20% on earnings up to £33,500. (In Scotland, this was up to £31,500).
Higher Rate: 40% on earnings between £33,501 and £150,000. (In Scotland, this was from £31,501).
Additional Rate: 45% on earnings above £150,000.

Let's illustrate with an example: If your tax code was 1150L and you earned £20,000 in the 2017/18 tax year, you would not pay tax on the initial £11,500 due to your Personal Allowance. The remaining £8,500 (£20,000 - £11,500) would then be taxed at the basic rate of 20% by your employer.

Understanding Other Tax Code Letters

While 1150L was standard, other letters in tax codes signify different circumstances, influencing your Personal Allowance and how your income is taxed. Understanding these variations helps to grasp the broader UK tax system:

L: indicates eligibility for the standard tax-free Personal Allowance. (As seen in 1150L).
M and N codes are linked to the Marriage Allowance. An "M" code shows you've received a transfer of 10% of your partner's Personal Allowance, while an "N" code indicates you've transferred 10% of your allowance to your partner.
S: Indicates that you are classified as a Scottish Income Tax payer.
T: Used when your tax code includes additional calculations to determine your Personal Allowance, for example, if your projected annual income exceeds £100,000.
K: This is a less common code that indicates you have taxable income or benefits that are worth more than your tax-free allowance. This could be due to paying tax from a previous year through your wages or pension, receiving taxable state benefits (like State Pension), or getting taxable company benefits such as a company car or health insurance. With a K code, the numbers show how much extra Income Tax you need to pay, though this shouldn't exceed 50% of your gross pay for that period.
0T: Often an emergency code, this means your applicable Personal Allowance has been used up, or that your employer doesn't have enough information (like a P45) to assign you the correct code. With a 0T code, you don't receive your Personal Allowance, and all your earnings are taxed from the first pound at the relevant rates (basic, higher, or additional).
BR, short for Basic Rate, means your entire income is taxed at the basic rate of 20% without any Personal Allowance. This code is often used if you have a second job since your Personal Allowance usually applies to your main job.
D0 & D1: These codes are for individuals with multiple jobs earning at higher income brackets. D0 means your entire income from that job is taxed at the higher rate of 40%, while D1 means your entire income is taxed at the additional rate of 45%.
NT: Signifies No Tax. This is rare and applies in specific circumstances, such as if you went bankrupt in the last year, work certain jobs, or live abroad but work in the UK.

Emergency Tax Codes and What They Mean for You

Sometimes, you could end up being placed on an emergency tax code. These codes are issued when HMRC doesn't have enough information about an employee’s income and tax details, making it difficult to issue the correct tax code. This is particularly common for new employees, especially if they don't have a P45 from a previous employer, haven't had a job before, or have moved from self-employment. Emergency codes are temporary and include codes like 1150L W1 or 1150L M1, BR, and 0T (for the 2017/18 tax year).

1150L W1 / M1: These emergency codes mean that your tax is calculated based only on what you're paid in the current pay period (week 1 or month 1), rather than on your earnings for the whole year. While you are still entitled to your Personal Allowance of £11,500 with these codes, the non-cumulative nature means you might initially overpay tax. This is often rectified once HMRC receives your P45 or other income details, and you should typically receive a tax refund for any overpaid amounts.
BR and 0T: As mentioned above, these can also be emergency codes. With a BR emergency code, you won't receive your Personal Allowance and will pay 20% tax on all your earnings. The 0T emergency code is even more impactful, as you also won't receive your Personal Allowance, and all your earnings will be taxed at the basic, higher, or additional rates, depending on your income level.

It’s important not to panic if you find yourself on an emergency tax code. While it might mean you're paying too much tax temporarily, these codes are designed to ensure some tax is collected until your correct code can be applied.

Why You Should Always Check Your Tax Code

Failing to check your tax code can have significant financial consequences. Research indicates that almost a third (31%) of UK adults who have checked their tax code have discovered they were on the wrong one at some point. A staggering 75% of those who found they were on the wrong tax code ended up overpaying HMRC, by an average of £689 each, collectively amounting to £5.8 billion nationally. Surprisingly, almost one in five (18%) UK adults have never bothered to check their tax code.

Common reasons for having an incorrect tax code include:

Changing Jobs: If you've recently changed employers or are awaiting your P45, HMRC might not have updated records, potentially taxing your new job as a second source of income.
Changes in State Benefits: While state benefits aren't taxed, they can consume part of your Personal Allowance, affecting your tax code.
Changes in Company Benefits: Taxable benefits like a company car or private health insurance provided by your employer can also impact your tax code.

How to Check and Correct Your Tax Code

Your tax code is usually found on your payslip, your P60 (a year-end summary from your employer), or an annual notification letter from HMRC. HMRC also sends letters with your new PAYE tax coding at the start of each tax year, usually around April 6th. Reviewing these documents is key to making sure your code is accurate.

If you think your tax code might be incorrect, the best way to sort it out is by reaching out to HMRC directly. While your employer can assist with initial payroll setup, they cannot change your tax code themselves; only HMRC can do this.

HMRC offers an online service called "Check your Income Tax for the current year". You'll need to sign in (or create an account) to use this service. Through this platform, you can:

Check your current tax code and Personal Allowance.
Check out your estimated income from jobs and pensions, along with the tax you’re likely to owe.
Update details of your income from jobs and pensions if they're not accurate.
See if your tax code has changed.
Notify HMRC about any changes that may impact your tax code.
Update employer or pension provider details.

HMRC generally receives income information directly from your employer, so if you've recently moved jobs or your pension details have changed, it's advisable to allow 3-5 days for these details to update before using the online service. Once you report a change, HMRC will contact you if your tax code changes, send you a new tax code notice, and inform your employer or pension provider. You should then see the new code on your next payslip, and your employer will make any necessary adjustments to your pay.

If you're unable to use the online service, you can ask your employer for help or contact HMRC by phone (0300 200 3300 for direct enquiries).

What Happens If You've Overpaid or Underpaid Tax?

At the end of each tax year, it's a good practice to review your P60, which details your total income and tax paid from that specific job. HMRC also receives this information from your employer. If you have underpaid or overpaid your taxes, HMRC will typically send you a P800 End of Year Tax Calculation Notice.

This letter will indicate whether you're due a tax refund or if you owe money to HMRC, the amount involved, and how the payment or refund will be processed. While the P800 is designed to be clear, some sections can be complex, and around 22% of recipients might unnecessarily call HMRC for reassurance. However, if you spot an error, contacting HMRC is the correct action.

It's crucial to be aware of the time limits for reclaiming overpaid Income Tax; you generally have four years from the end of the tax year in which you are trying to claim. Therefore, the earlier you address any discrepancies, the better.

Conclusion

While tax code 1150L might be a relic of the 2017/18 tax year, the principles it embodies – the Personal Allowance, the cumulative nature of tax codes, and the importance of ensuring your code is accurate – remain evergreen in the UK tax system.

Understanding your tax code is a vital component of sound financial management. By regularly checking your payslips, P60s, and HMRC communications, and utilising the online tools available, you can proactively ensure you're paying the correct amount of Income Tax and avoid the common pitfalls of overpayment. Don't be one of the many who overpay; stay informed and take control of your UK tax obligations.

FAQ:

1. What does Tax Code 1150L mean on my payslip?

Tax Code 1150L was the standard UK tax code for the 2017/18 tax year, indicating a Personal Allowance of £11,500. This meant you could earn up to that amount before paying Income Tax.

2. Is Tax Code 1150L still used today?

No, 1150L applied specifically to the 2017/18 tax year. For current allowances, check out What Is the Current Tax-Free Allowance in the UK for 2025?.

3. What’s the difference between 1150L and S1150L?

S1150L is the Scottish variant of the 1150L tax code, used for taxpayers residing in Scotland. It reflects different income thresholds and tax bands.

4. What is a cumulative tax code and why does it matter?

A cumulative tax code like 1150L calculates tax based on your total earnings from the start of the tax year. This ensures accurate deductions and prevents overpayment. Learn more in What is the difference between cumulative and non-cumulative tax codes?.

5. What should I do if I’m on an emergency tax code like 1150L W1 or M1?

Emergency codes are temporary and may cause overpayment. You can resolve this by submitting your P45 or updating your details with HMRC.

6. How do I check if my tax code is correct?

You can check your tax code on your payslip, P60, or via HMRC’s online service. If it’s wrong, you may be overpaying.

7. What happens if I’ve overpaid tax due to the wrong code?

HMRC will issue a P800 notice if you’ve overpaid, and you may be eligible for a refund. Learn more in What Is a P800 Tax Calculation Notice?