Tax Code 1257N Explained

What does 1257N mean?

1257N is the mirror of 1257M. You are the partner who has transferred 10% of your personal allowance to your spouse or civil partner. Your allowance is reduced from £12,570 to £11,310. The arrangement only saves the household money if you are not using your full allowance - typically because you earn below £12,570.

Breakdown of the code

• 1257

  Number

  Multiply by 10 - base allowance.

• N

  Letter

  Marriage Allowance transferor - allowance reduced by £1,260.

Worked example

Part-time worker who has transferred Marriage Allowance on £8,000 (paid monthly).

Still no tax - earnings below the reduced allowance.

Who should be on 1257N?

• Non-earning or low-earning spouses who have transferred 10% of their allowance to a basic-rate-paying partner

Common problems

• Your earnings have risen above the reduced £11,310 allowance - you are now paying tax you would not otherwise owe.
• Marriage Allowance was claimed but the partner is no longer eligible.

What to do if 1257N 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 1257N 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.