Tax Code 1050L Explained

What does 1050L mean?

1050L is a reduced-allowance variant of the standard L code. Your tax-free amount has been cut from £12,570 to £10,500, a difference of £2,070 that HMRC is collecting through your tax code. The most common reasons are a benefit-in-kind (company car, fuel, medical insurance) reported on a P11D, a previous-year underpayment being recovered, or unpaid tax on dividend or savings income. Each component should be itemised on your P2 Notice of Coding in your personal tax account. Because L codes are cumulative, the reduced allowance is spread evenly across the tax year. If a benefit ends partway through the year, ask your employer to send an updated P11D to HMRC so the code can be lifted back toward 1257L for the remaining months.

Breakdown of the code

• 1050

  Number

  Multiply by 10 - £10,500 of tax-free pay.

• L

  Letter

  Standard allowance with the number-only adjustment.

Worked example

Salaried employee with a small benefit-in-kind on £30,000 (paid monthly).

~£35/month more tax than 1257L because of the reduced allowance.

Who should be on 1050L?

• Employees with reportable benefits-in-kind
• Taxpayers repaying a previous-year underpayment via PAYE
• Workers with untaxed savings or dividend income within their PAYE record

Common problems

• A benefit has ended but the code has not been updated.
• A prior-year underpayment is being recovered but the figure is incorrect.

What to do if 1050L looks wrong

1. Sign in to your HMRC personal tax account at gov.uk/personal-tax-account and open the latest P2 (Notice of Coding) - it itemises every adjustment.
2. Compare the code on your most recent payslip with the code HMRC has on file; employers occasionally apply an old code if a P9 was missed.
3. Confirm your employer received your P45, or that you completed a starter checklist if you joined mid-year.
4. Check whether benefits-in-kind such as a company car, fuel, or medical insurance have changed and ask payroll to file an updated P11D.
5. Call HMRC on 0300 200 3300 (Mon-Fri, 8am-6pm) with your National Insurance number if the online tools cannot resolve it.
6. If you have overpaid, HMRC normally refunds via your next payslip once the code is corrected. For closed years request a P800 review.

If you should be on a different code…

Quick decision tree - when 1050L is the wrong fit, here is the most likely correct code.

• If you have a single PAYE job and no benefits-in-kind - you should be on 1257L.

  Standard personal allowance of £12,570 for England, Wales and NI.