Tax Code NT Explained

What does NT mean?

NT means "no tax" and is the only PAYE code that instructs your employer or pension provider to deduct zero income tax from your gross pay, regardless of how much you earn. It is uncommon and is only issued by HMRC in very specific situations: when you are a recognised diplomatic or consular employee with treaty exemption, when you are a non-UK resident whose income is taxed under a double-taxation agreement, when a pension has been moved to a Qualifying Recognised Overseas Pension Scheme (QROPS) under specific rules, or when HMRC has reviewed your overall position and determined that no tax should be collected at source - for example because your total income across all sources is below the personal allowance, or because tax is being collected another way such as through Self Assessment. Because NT switches off withholding entirely, it should never appear unless HMRC has explicitly written to you authorising it on form P2 or P6. National Insurance is unaffected by NT - your employer continues to deduct Class 1 NICs in the usual way.

Breakdown of the code

• NT

  Letter pair

  No Tax - payroll deducts zero income tax. Always backed by an HMRC notice (P2/P6).

Worked example

Foreign embassy administrative employee with treaty exemption on £30,000 (paid monthly).

Zero income tax. Class 1 NI continues as normal.

Who should be on NT?

• Diplomatic and consular employees with treaty exemption
• Non-UK residents covered by a double-taxation agreement
• Pensions moved to a QROPS under qualifying conditions
• Cases where HMRC has confirmed total income falls below the personal allowance

Common problems

• Applied without an accompanying P2 - almost always indicates a payroll error and may store up a tax bill.
• Used for Self Assessment cases without the supporting HMRC notice.

What to do if NT 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 NT 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.