Tax code K codes (e.g. K475) explained
Negative allowance — untaxed income exceeds your personal allowance. Here's exactly what it means for your payslip in 2026/27, who should have it, and what to do if it looks wrong.
What K codes (e.g. K475) means
A K code means your deductions exceed your personal allowance — instead of getting tax-free pay, an amount is added to your taxable income. K475 means £4,750 is added to your taxable pay for the year.
Mechanically: company benefits, state pension or tax owed from earlier years have used up more than your entire £12,570 allowance.
Who gets K codes (e.g. K475)?
Common causes: a valuable company car plus fuel benefit, owing tax from a previous year being collected through your code, or receiving the state pension while still working (the state pension is taxable but paid gross).
What you should do
Check the breakdown in your PAYE coding notice against reality — company car values and estimated benefits are frequently out of date. Note: tax deducted under a K code can't exceed 50% of your gross pay in any period.
Frequently asked questions
What does tax code K mean?
Negative allowance — untaxed income exceeds your personal allowance. A K code means your deductions exceed your personal allowance — instead of getting tax-free pay, an amount is added to your taxable income. K475 means £4,750 is added to your taxable pay for the year.
Is tax code K wrong?
Check the breakdown in your PAYE coding notice against reality — company car values and estimated benefits are frequently out of date. Note: tax deducted under a K code can't exceed 50% of your gross pay in any period.
Who gets tax code K?
Common causes: a valuable company car plus fuel benefit, owing tax from a previous year being collected through your code, or receiving the state pension while still working (the state pension is taxable but paid gross).