NT Tax Code
The NT tax code means no Income Tax is deducted from your pay or pension by your employer or pension provider. It is usually issued when HMRC believes your tax is being collected another way, such as through Self Assessment, or when your income is not currently taxable.
What Does the NT Tax Code Mean?
This guide explains in plain English:
What the NT tax code means
Why HMRC may have issued it
When it’s correct (and when it’s risky)
What to do if you’ve been given an NT code
How to fix it if it’s wrong
Written by UK tax professionals, this guide focuses on real-world scenarios, not just theory.
NT stands for “No Tax.”
If you have an NT tax code, your employer or pension provider will:
Pay your full income to you
Deduct £0 Income Tax
Still deduct National Insurance (if applicable)
This usually happens when HMRC believes:
You have already paid enough tax elsewhere, or
Your income is not currently taxable, or
Your tax is being collected another way (such as through Self Assessment)
Common Reasons You Might Have an NT Tax Code
An NT tax code is often issued for administrative or technical reasons rather than because your income is truly tax-free.
1. You Are Self-Employed and Also Employed
If you complete a Self Assessment tax return, HMRC may decide to collect all your tax through that return instead of your PAYE job.
Your PAYE job may then be given an NT code temporarily.
2. You Have Multiple Jobs or Pensions
HMRC might move your Personal Allowance to one source of income and apply NT to another to prevent under- or over-taxing.
3. You Are Living or Working Overseas
If HMRC believes you are:
Non-UK resident, or
Covered by a double taxation agreement
they may apply an NT code so UK tax is not deducted.
4. Bankruptcy or Insolvency Situations
In certain insolvency cases, HMRC applies an NT code so tax can be dealt with through a different legal process.
5. HMRC Has Incomplete or Incorrect Information
Sometimes an NT code is simply issued because:
A job change wasn’t processed properly
A P45 or P60 was missing
Your income was misclassified
This is more common than many people realise.
Is the NT Tax Code Good or Bad?
It depends entirely on why you have it.
NT Can Be Correct If:
You genuinely owe no Income Tax
Your tax is being paid via Self Assessment
You are non-resident for UK tax purposes
You are receiving certain types of non-taxable income
NT Can Be Dangerous If:
You still earn above the Personal Allowance
You are employed normally in the UK
HMRC has made an error
If it’s wrong, you could face:
A large tax bill later
Backdated tax
Interest charges
Possible penalties
How to Check If Your NT Tax Code Is Correct
You should check:
Your latest payslip
Your Personal Tax Account
Any letters from HMRC
Whether you still earn over the Personal Allowance
Ask yourself:
Am I employed or receiving a pension?
Do I still live and work in the UK?
Am I paying tax another way (Self Assessment)?
If the answer is “yes” to employment and “no” to Self Assessment or overseas residence, the NT code may be wrong.
What To Do If You Have an NT Tax Code
Step 1: Don’t Ignore It
An NT code can look attractive because your take-home pay increases — but this can be misleading.
Step 2: Log Into Your HMRC Personal Tax Account
Check:
What HMRC thinks your income is
Which employer or pension the NT code applies to
Whether other income sources exist
Step 3: Contact HMRC or Your Accountant
You may need to confirm:
Your employment status
Your residency
Whether you file a tax return
Whether another job or pension exists
Step 4: Keep Money Aside Just in Case
If you think the code may be wrong, set aside the extra pay until it’s confirmed.
NT Tax Code and Self Assessment
If you are on Self Assessment and also have PAYE income, HMRC sometimes uses an NT code so:
PAYE does not deduct tax
All tax is paid through your tax return
This can be useful for:
Company directors
Contractors
High earners
People with complex income
However, this must be done intentionally and correctly — otherwise underpayment occurs.
NT Tax Code and Pensions
If your pension provider uses an NT code, it usually means:
HMRC believes the pension is not currently taxable, or
Tax is being collected from another source
This should be checked carefully, especially if:
It is your only income
You recently retired
You changed pension providers
How Long Does an NT Tax Code Last?
An NT tax code can be:
Temporary (weeks or months)
Applied for a full tax year
Changed as soon as HMRC receives new information
It should not be assumed to be permanent.
NT Tax Code vs Normal Tax Codes
Here is a simple comparison:
| Tax Code | Meaning | Tax Deducted |
|---|---|---|
| 1257L | Standard Personal Allowance | Normal PAYE tax deducted |
| BR | All income taxed at basic rate | 20% on all earnings |
| 0T | No Personal Allowance applied | Taxed from first pound |
| NT | No tax collected at source | 0% Income Tax deducted |
Can HMRC Backdate Tax If NT Was Wrong?
Yes.
If HMRC later decides the NT code was incorrect, they can:
Recalculate your tax
Issue a bill
Adjust your future tax code
Collect tax through PAYE or Self Assessment
This is why checking early is crucial.
Key Takeaways
NT means no Income Tax is being deducted
It can be correct — or a serious mistake
Common with Self Assessment, overseas workers, and multiple incomes
Always check why you’ve been given it
Never assume it means your income is tax-free
When You Should Get Professional Advice
You should seek professional help if:
You don’t understand why you have an NT code
You have more than one income source
You are a director or contractor
You recently moved abroad
You received a sudden change in take-home pay
HMRC letters are unclear or conflicting
An accountant can quickly confirm whether your code is correct and prevent future tax problems.
Frequently Asked Questions About the NT Tax Code
What does the NT tax code mean?
The NT tax code means “No Tax”. It tells your employer or pension provider not to deduct Income Tax from your pay or pension. You still usually pay National Insurance if applicable.
Is the NT tax code good or bad?
It depends on your situation. It can be correct if your tax is being collected through Self Assessment or you are non-resident for UK tax purposes. It can be risky if you still earn above the Personal Allowance and HMRC has made an error.
Why has HMRC given me an NT tax code?
HMRC may issue an NT tax code if you:
Are self-employed and also employed
Have multiple income sources
Live or work overseas
Are in certain insolvency situations
Have incomplete or incorrect records with HMRC
Will I have to pay the tax back later?
Yes, if the NT tax code was applied incorrectly. HMRC can backdate tax and issue a bill or adjust your future tax code to recover what is owed.
Should I contact HMRC if I receive an NT tax code?
Yes. If you are unsure why you have been given an NT tax code, you should check your Personal Tax Account or contact HMRC or an accountant to confirm it is correct.
Does NT mean my income is tax-free?
No. NT only means tax is not being deducted at source. Your income may still be taxable and collected later through Self Assessment or another method.
Can NT tax code apply to pensions?
Yes. Pension providers can use an NT tax code if HMRC believes your pension income should not be taxed at source or is being taxed elsewhere.
How long does an NT tax code last?
An NT tax code can be temporary or last for an entire tax year. It can change at any time if HMRC updates your income information.
What should I do if my take-home pay suddenly increases?
A sudden increase in take-home pay can indicate a tax code change. You should check your payslip and Personal Tax Account immediately to ensure the NT tax code is correct.
Unsure If Your NT Tax Code Is Correct?
An NT tax code can be completely valid — or it can quietly build up a tax bill that appears later.
If you’re unsure why you’ve been given one, it’s best to check before problems arise.
Our UK tax specialists can:
Review why HMRC issued your NT tax code
Confirm whether it is correct for your situation
Liaise with HMRC on your behalf if needed
Prevent unexpected tax bills and penalties
Whether you are employed, self-employed, a director, or receiving a pension, we can give you clarity and peace of mind.
Don’t wait until HMRC sends a bill.
Get your tax code checked today and stay in control of your finances.
Final Thought
The NT tax code is one of the most misunderstood tax codes in the UK.
It can be perfectly legitimate — but when it’s wrong, it creates silent tax debt that only appears later.
Understanding it now protects you from stress, surprise bills, and penalties in the future.
If you’ve been given an NT tax code and aren’t sure why, checking it today is always safer than fixing it next year.