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.