Tax codes are part of the PAYE system, so there isn’t a self-employed tax code as such.
But it’s still important that the self-employed understand certain tax reference numbers, like the Unique Taxpayer Reference (UTR).
Self-employed tax codes at a glance
- a tax code tells HMRC how much income tax to collect
- self-employed people only have tax codes if they also earn through PAYE employment
- common codes include 1257L, BR, and K
- you can check your code through your HMRC online account
- wrong code? Contact HMRC to fix it and prevent over (or under) paying tax
Find out everything you need to know about tax codes for the self-employed, including:
What is a tax code?
A tax code is a combination of numbers and letters used by HMRC to calculate how much income tax you should pay through the PAYE system.
The number in your tax code reflects your personal allowance (the amount you can earn before paying tax) and any other factors that affect how much tax you owe.
Example:
- 1257L – the standard tax code for most taxpayers in 2025-26, representing the £12,570 personal allowance
- BR – all your income is taxed at the basic rate (20 per cent) with no personal allowance
- K – you have income that isn’t being taxed another way, for example, you owe tax from previous years or receive taxable benefits
In simple terms: your tax code tells HMRC how much of your income should be taxed.
Do self-employed people have a tax code?
If you only earn money through self-employment, you won’t normally have a tax code. You pay income tax via the Self Assessment system instead of PAYE.
However, you’ll also have a tax code for employment if you:
- have a part-time job
- receive a pension
- or work as a freelancer with some PAYE income
Your self-employed profits are reported separately on your annual tax return.
Self-employed tax codes apply only when you have PAYE income alongside your business income.
Common tax codes and what they mean
| Tax code | What it means | When it’s used |
| 1257L | Standard personal allowance (£12,570) | Standard personal allowance (£12,570) |
| BR | All income taxed at 20% (no allowance) | Second jobs or pensions |
| D0 / D1 | All income taxed at 40% / 45% | Higher or additional rate taxpayers |
| K | You owe tax or have untaxed benefits | Benefits in kind, unpaid tax |
| NT | No tax deducted | Certain freelance contracts or income types |
HMRC updates codes each tax year. Always check the latest guidance on the government website.
How to check your tax code
You can check your tax code in several ways:
- Log in to your HMRC personal tax account
- Review your income tax summary
- Check recent payslips, P45, or P60 documents
- If you think it’s wrong, use HMRC’s online service or call 0300 200 3300
Why has my tax code changed?
Your tax code may have changed if you:
- start or leave a job
- receive company benefits or expenses
- claim allowances (e.g. marriage allowance)
- pay back underpaid tax
What to do if your tax code is wrong
If your tax code doesn’t look right:
- Contact HMRC directly – online or by phone
- Provide your National Insurance number and most recent income details
- Keep records of your communication
- If you’re employed, tell your employer’s payroll department too
HMRC will review your details and issue a corrected code if needed. If you’ve overpaid, you’ll receive a refund. If you’ve underpaid, HMRC will collect the difference through your next code or Self Assessment.
What is emergency tax?
If you’re returning to employment after being self-employed, your new employer may put you on an emergency tax code. These are used when your new employer isn’t aware of the details of your previous income.
What is the emergency tax code?
There are several emergency tax codes, including:
- 1257 W1
- 1257 M1
- 1257 X
Paying your Self Assessment tax bill through your tax code
If you have income from both self-employment and employment, you may be able to pay your Self Assessment tax bill through your tax code.
This means that HMRC adjusts your tax code to reflect your self-employed earnings, and will take Self Assessment tax from your salary through PAYE in equal instalments over 12 months.
To use this option you need to:
- have a Self Assessment tax bill of less than £3,000
- send your online tax return by 30 December
There are other criteria too, which you can check on the government’s website.
What is a UTR number?
A tax reference that all self-employed people do have is a Unique Taxpayer Reference (UTR). This isn’t a tax code or a National Insurance number.
Instead, a UTR is a 10-digit code that you’re given by HMRC when you register as self-employed. This is your personal reference for Self Assessment.
If you set up a limited company, your company is a separate legal entity, so it will have a separate UTR.
Your UTR doesn’t change. You have the same one throughout your life. If you stop being self-employed and then become self-employed again later, you’ll still have the same UTR.
You can find your UTR on previous tax returns and in your HMRC online account. It’s also found on other documents from HMRC, like notices and payment reminders. If you can’t find your UTR, contact HMRC.
Paying tax if you’re self-employed
If you’re self-employed, you’re responsible for:
- telling HMRC you’re self-employed
- filing a Self Assessment tax return each year
- paying your tax bill and National Insurance contributions
If you stop being self-employed, you need to tell HMRC, otherwise you’ll still be expected to file a tax return and you may be fined if you don’t. Even if you begin paying tax through PAYE and you have a tax code, HMRC won’t automatically assume that you’re no longer earning self-employed income, so remember to let them know.
Check out our tax and Self Assessment resource for more tips.
Common mistakes to avoid
- thinking self-employed people always have a tax code – they don’t unless they have PAYE income
- ignoring changes in your code on payslips or P60s
- forgetting to inform HMRC when your income or benefits change
- using an old code after changing jobs or going self-employed
Tip: always review your tax code when your income changes. Mistakes are easier to fix early.
Self-employed tax codes in summary
- your tax code determines how much tax you pay through PAYE
- if you’re self-employed, you’ll only have one if you also receive PAYE income
- always check your code, understand what it means, and contact HMRC if something looks wrong
- it’s a simple step that helps you stay compliant and avoid unexpected tax bills
Self-employed tax code FAQs
What does the L in my tax code mean?
The L in your tax code means you’re entitled to the standard personal allowance. Most people in 2025-26 will have the code 1257L.
How do I find my self-employed tax code?
If you also have PAYE income, check your payslip or HMRC account. If you’re fully self-employed, you won’t have a tax code.
What if my tax code is wrong?
If you think your tax code is wrong, contact HMRC or check online. Provide your latest earnings so they can update your code quickly.
Can I change my tax code myself?
No, you can’t change your tax code yourself. Only HMRC can issue or amend tax codes.
More guides on running your small business
- What can I claim on tax? A guide to self-employed expenses
- How to go self-employed in the UK
- Which bank has the best business bank account?
- What does business insurance cover?
Looking for self-employed insurance?
With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it’s public liability insurance, professional indemnity or whatever else you need, we’ll run you a quick quote online, and let you decide if we’re a good fit.