Tax Code SK475 Explained

What does SK475 mean?

SK475 is the Scottish equivalent of K475. The K-code mechanics are identical - £4,750 is added to your taxable pay across the year because untaxed income (benefits-in-kind, state pension, prior underpayments) exceeds your personal allowance - but the resulting taxable amount is charged at Scottish income-tax rates (19% / 20% / 21% / 42% / 45% / 48% for 2026/27) rather than rUK rates. The 50% deduction cap still applies. Scottish K codes are most often issued to higher-earning Scotland-based employees with company cars or other large benefits-in-kind.

Breakdown of the code

• S

  S

  Scottish prefix.

• K

  Letter

  K codes flip the maths: instead of a tax-free amount, this number is added to your taxable income.

• 475

  Number

  Multiply by 10 - £4,750 added to your taxable pay across the year.

Worked example

Senior manager with a company car (P11D £18,000) and medical (P11D £2,200) on £60,000 (paid monthly).

Taxable pay rises to £64,750 - additional ~£1,900/year tax for a higher-rate payer.

Who should be on SK475?

• Employees with significant benefits-in-kind (company car, medical, fuel)
• State pensioners receiving employer pension above the allowance
• People repaying a prior-year underpayment through their tax code
• Multiple-source taxpayers where adjustments exceed the allowance

Common problems

• A benefit has ended but the K number has not yet reduced - payroll needs an updated P11D submission.
• Multiple adjustments stacked together can push the K number high enough to hit the 50% deduction cap.
• A prior-year underpayment is being collected over too short a period - request a longer recovery if it causes hardship.

What to do if SK475 looks wrong

1. Open your latest P2 in your personal tax account - every adjustment line in a K code is itemised (company car, fuel, medical, prior underpayment).
2. If a benefit has ended (you returned the company car, your medical scheme stopped) ask payroll to file an updated P11D and HMRC will reduce the K number.
3. Confirm the 50% regulatory cap is being applied - your employer cannot deduct more than 50% of your gross pay through a K code.
4. If a prior-year underpayment is being collected, check the HMRC calculation; you can spread it over 2-3 years if it would cause hardship.
5. Call HMRC on 0300 200 3300 to dispute the underlying figures, not just the code.

If you should be on a different code…

Quick decision tree - when SK475 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.

• If you have moved out of Scotland - you should be on K475.

  Adds £4,750 to your taxable pay because untaxed income exceeds your allowance.