Tax Code Letters M and N

If you have the tax code letter M or N after the number in your tax code notification then these two letters are linked as it means that you  have either transferred or have received a transfer of the 10% personal allowance to/from your partner.

The marriage transfer allowance was introduced so that those who did not pay tax on their earnings up to the full personal allowance, could transfer 10% of their allowance to their partner (as long as their partner was only paying basic rate tax).

So, for example if your tax code is 1265M that means that your partner has transferred 10% of their personal allowance to you (amounting to £1,150) and this is added on to your personal allowance of £11,500, giving you a total personal allowance of £12,650.

Conversely, if your tax code is 1035N then that is likely to be because you have volunteered to give up 10% of your personal allowance to transfer over to your partner who can make use of it. This is worked out by taking £1,150 away from £11,500, thus giving you a personal allowance of £10,350.

(The above figures are based on amounts for the 2017/18 tax year.)

If you believe that your tax code is wrong then you should contact HMRC on 0300 200 3300.



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