Tax codes can be confusing, especially when an unexpected one like M1 appears on your payslip. If you’ve found yourself asking, “What is the M1 tax code?” or wondering why it’s impacting your tax payments, you’re not alone. Many taxpayers are unfamiliar with the M1 tax code, which can leave them uncertain about their finances.
In this article, we’ll break down the M1 tax code in simple, digestible terms, explaining why it appears, how it works, and how it can affect your tax situation. Whether you’re a higher earner or just trying to get your tax affairs in order, understanding the M1 tax code can help you avoid costly mistakes and ensure that you’re paying the right amount of tax.
Let’s get started.
What is the M1 Tax Code?
The M1 tax code, often called the “emergency tax code,” is used by HMRC (Her Majesty’s Revenue and Customs) when they do not have enough information about your income, allowances, or deductions to issue a standard tax code. It applies when your employer or pension provider is unsure about your exact tax situation, or if there has been a significant change in your financial circumstances.
The “M” in the M1 code stands for “Month 1”, which indicates that the tax is being calculated on a monthly basis, rather than across the whole year. Essentially, the M1 code removes any allowances or previous year’s tax adjustments, treating the month as if it’s the beginning of the tax year. This results in a higher amount of tax being deducted.
In a nutshell, the M1 tax code is a way of ensuring that HMRC collects tax from you, even when there’s uncertainty about your tax details. However, while it’s a temporary measure, it can lead to overpayments if it’s not corrected promptly.
When and Why Do You Get an M1 Tax Code?
There are several scenarios in which an M1 tax code might be applied. Here are the most common reasons:
- Starting a New Job or Job Change: If you start a new job and your new employer hasn’t received your tax details from your previous employer, you may be assigned an M1 tax code. This often happens when HMRC is still waiting for your P45 (a document that outlines your tax details from your previous employment).
- Receiving Multiple Sources of Income: If you have more than one job or pension and HMRC is unsure of how much you’re earning overall, they may issue an M1 code for one or more of your income sources.
- Error or Delay in Processing Your Information: Sometimes, HMRC may issue an M1 tax code if there has been a delay in updating your tax details or an error in their system.
- Changes to Your Personal Allowance: If there are significant changes to your income or allowances—for example, you’ve recently been awarded a tax-free allowance or you’ve become eligible for a marriage allowance—you may temporarily be given an M1 code until everything is updated.
In short, the M1 tax code is used when there’s a lack of clarity in your tax situation. It ensures that tax is still collected, but it doesn’t take into account any adjustments or allowances you might be entitled to.
How the M1 Tax Code Affects Your Tax Payments
When you’re assigned the M1 tax code, your tax payments will be calculated based on the monthly amount of income you receive, rather than the full year. This means that personal allowances (the amount you can earn before paying tax) and any other tax-free benefits are ignored.
Example:
Person A: A higher earner making £50,000 per year, with tax-free allowances (e.g., the personal allowance of £12,570 for the 2026/27 tax year).
- Without the M1 Code: Person A would pay tax on the amount they earn over £12,570. The tax would be spread out over the year, so they only pay a small amount each month.
- With the M1 Code: The M1 code treats Person A as if they are starting a new job with no personal allowance. As a result, they pay tax on the full £50,000 in a single month, leading to a higher tax deduction than they would normally experience.
Person B: A lower earner making £15,000 per year.
- Without the M1 Code: Person B would pay tax on income over the personal allowance (£12,570 in 2026), so only £2,430 is taxable.
- With the M1 Code: Like Person A, Person B would also pay tax on the full £15,000 in one month, which is much higher than it would be under normal circumstances.
As these examples show, the M1 tax code can result in a higher-than-usual tax deduction, which could significantly impact your monthly take-home pay.
How to Check If You Have an M1 Tax Code
If you suspect that you’ve been given an M1 tax code, it’s easy to check. You can find your tax code on your payslip or P60. Look for a code that starts with “M1” or “W1”. If you’re unsure, you can also check your tax code online through your personal HMRC account.
Steps to Check Your Tax Code:
- Review Your Payslip: Your tax code will be listed at the top of your payslip, next to your National Insurance number.
- Log in to Your HMRC Account: If you have an online account with HMRC, you can view your tax code and any recent updates.
- Contact Your Employer or Pension Provider: If you’re still unsure, ask your employer’s payroll department or your pension provider to confirm your tax code.
What to Do If You Are Assigned the M1 Tax Code?
If you discover that you’ve been assigned the M1 tax code, don’t panic. Here’s what you can do:
- Contact HMRC: If you haven’t already provided your full tax information, contact HMRC to ensure they have accurate details about your income and allowances.
- Update Your Information: If you’ve recently started a new job or had any changes in your circumstances, make sure your employer has all the necessary information to update your tax code.
- Claim Any Tax Overpayment: If the M1 code has caused you to overpay tax, you may be able to claim a refund through your self-assessment or by contacting HMRC.
In many cases, the M1 code is temporary, and HMRC will correct it once they have more information. However, it’s always a good idea to check and ensure everything is in order.
How to Avoid M1 Tax Code Issues
The best way to avoid problems with the M1 tax code is to ensure your tax information is up to date and accurate. Here are some tips to help you:
- Keep Your Information Updated: Make sure HMRC has your latest employment details, income, and any changes to your personal circumstances.
- Check Your Tax Code Regularly: Take the time to review your payslips and P60s to spot any potential issues with your tax code early.
- Notify HMRC of Job Changes: If you change jobs or receive income from multiple sources, inform HMRC as soon as possible.
By staying proactive, you can minimise the chances of being assigned an M1 tax code and avoid any unnecessary overpayments.
Conclusion
The M1 tax code can seem daunting, but once you understand how it works, it’s easier to manage. If you’re assigned this code, it’s important to act quickly to ensure that it doesn’t result in overpayment of taxes. By checking your tax code regularly and providing the necessary information to HMRC, you can avoid the M1 tax code issues and ensure you’re paying the correct amount of tax.
Remember, the M1 tax code is a temporary measure. Once HMRC has updated your details, your tax code should return to normal, and you’ll get back any overpaid tax. Keep an eye on your payslip, stay informed, and don’t hesitate to reach out to HMRC if you have any concerns.
