tax code

In the UK, every person paid under the PAYE scheme is allocated a tax code. This is in the form of a number followed by a letter or letters, or a letter followed by numbers. The code determines the amount of the tax free income the person receives before tax deductions occur. Tax codes are normally reviewed, and if necessary adjusted, at least once a year, to take account of the tax paid during the year, and any variations in income.
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