It’s normal to presume that the tax code on your payslip is correct, but if you feel like you’re paying an extortionate amount of tax or not enough – you may be onto something.
In most cases, it’s because HMRC need to know a little more about you before they can go ahead and give you the right tax code, but you’ll be emergency taxed until then.
This blog is focusing on the M1 tax code, so if this one has made an appearance on your payslip, you’re in the right place.
What is the M1 tax code?
The M1 tax code is an emergency tax code, so it’s only intended to be a temporary measure. It can also be referred to as ‘month 1’, because it’s usually only assigned in the first month of employment with a new employer.
You likely have this tax code because HMRC don’t have enough information to work out what tax rates and allowances you’re eligible to pay. Rather than giving you a month off, they ‘emergency’ tax you to ensure you are paying some taxes – regardless of whether it’s too much or too little.
Why have I been given a M1 tax code?
You’ll likely see the M1 tax code on your pay slip if:
- You have a new job and haven’t given your employer your P45 (or you don’t have one)
- You frequently switch jobs
- You’ve received company benefits for the first time
It’s generally nothing to worry about – see it as a precautionary measure put in place by HMRC to ensure you’re paying tax.
Example of what the M1 tax code looks like on your payslip
Let’s say you have the standard personal allowance of £12,570. Your tax code should be 1257L. You’re being emergency taxed if you have the following numbers and letters after your tax code:
- 1257L M1 – if you’re paid monthly
- 1257L W1 – if you’re paid weekly
- 1257L X – if your pay schedule varies
How does the M1 tax code affect my pay?
The M1 tax code will consider your monthly earnings, rather than your annual income. For example, you start a new job at the beginning of the tax year, and still have your full tax-free personal allowance of £12,570 available. This means you have £1,047.50 to offset against your wages each month. But with the M1 tax code, you’d only benefit from a single month’s tax-free allowance, meaning it will completely ignore the £11,522.50 you have left.
M1 Tax Bands
| Tax Band | Annual Threshold | M1 Monthly Threshold | Rate of Tax |
| Personal Allowance | £0 - £12,570 | £0 – £1,047.50 | 0% |
| Basic Rate | £12,571 - £50,270 | £1,047.51 – £4,189.17 | 20% |
| Higher Rate | £50,271 - £125,140 | £4,189.18 – £10,428.33 | 40% |
| Additional Rate | £125,140 upwards | £10,428.33 upwards | 45% |
How can I change my M1 tax code?
This is a temporary non-cumulative emergency code – and in most cases it fixes itself after you’ve been in your new job for a couple of months. If this doesn’t happen, and your employer can’t help you, you’ll need to contact HMRC either via phone on 0300 200 3300 or online.
Will I receive a tax rebate when I’m on the M1 tax code?
If you’ve been on the M1 tax code for a while, you may receive a tax rebate. HMRC will normally manage this as an automatic adjustment when your employer makes their PAYE submission, but if you don’t want to wait, you can check how to claim a refund here.
Need help with your tax code? Give us a call on 020 3355 4047 or get an instant online quote.
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