The tax system is based around the annual tax free pay allowance split over 52 weeks of the tax year.  Your tax code indicates how much your annual allowance is.  We allow this weekly amount of tax-free pay when we work out your tax deductions.

If the role you are being paid for through is a second income, or if you have a pension which attracts your tax allowance, you must inform us.  If you don’t, the tax code we use might be wrong and you might underpay tax which HMRC will eventually ask you to pay back.