Compliance
UK Payroll Alert: New Tax Codes from 6 April 2026 & What Employers Should Do
UK tax year 2026–27 begins April 6—critical updates to personal allowances and tax codes mean employers must act to avoid payroll issues.
By NomadicTax Research Team • 5-8 min read • March 29, 2026
## What's New on 6 April 2026?
HMRC has published updated **PAYE tax codes** for the 2026–27 tax year. Key takeaways:
- The **Personal Allowance** (amount you can earn before paying income tax) remains at **£12,570** for most UK taxpayers.([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/6996e9b3b33a4db7ff889e08/P9X_2026_Tax_codes_to_use_from_6_April_2026.pdf?utm_source=openai))
- Thresholds have weekly (£242) and monthly (£1,048) equivalents which are used in payroll calculations.([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/6996e9b3b33a4db7ff889e08/P9X_2026_Tax_codes_to_use_from_6_April_2026.pdf?utm_source=openai))
- There’s a specific **emergency tax code**: **1257L**, applicable if correct coding isn’t yet confirmed.([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/6996e9b3b33a4db7ff889e08/P9X_2026_Tax_codes_to_use_from_6_April_2026.pdf?utm_source=openai))
## Vital Actions for Employers
- Update payroll systems with new tax codes **before 6 April 2026** so everything runs smoothly.([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/6996e9b3b33a4db7ff889e08/P9X_2026_Tax_codes_to_use_from_6_April_2026.pdf?utm_source=openai))
- Verify each employee has been issued the correct code—miscoding can lead to under- or over-taxing.
- Monitor notifications from HMRC; sometimes codes change during the year due to circumstances like changes in benefits or employment status.
- Educate your payroll team and bookkeepers to use HMRC tools and avoid human error.
## Why These Updates Matter
- Incorrect tax coding can lead to disputes and unexpected liabilities—both for employees and employers.
- Emergency codes tend to collect more tax; if used incorrectly, they hurt employee net pay.([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/6996e9b3b33a4db7ff889e08/P9X_2026_Tax_codes_to_use_from_6_April_2026.pdf?utm_source=openai))
- Tax thresholds remaining frozen impacts everyone, especially those with rising wages. More employees may find themselves paying part of their salary at higher tax rates. (Related to frozen tax thresholds in broader UK economic forecasts.)([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/media/69a6d7b62e1f4fbda4252208/economic-and-fiscal-outlook-march-2026-web-accessible.pdf?utm_source=openai))
## Example Scenario
Imagine a mid-level UK employee due a promotion with a modest salary bump in May 2026. If payroll isn't updated properly, they could be taxed under the wrong rate or code, eroding take-home pay—or, worse, HMRC issues a correction later with penalties or back-dated liabilities.
## What Employers Should Do Now
1. Get software ready; ensure it has the latest updates
2. Notify employees of any changes that affect their take-home pay
3. Double-check payroll records after the first pay run under the new codes
4. Keep employees’ personal information (benefits, other income) up to date to avoid code mismatches
**Final thoughts:** While the adjustments aren’t massive, getting this right matters—for your employees’ trust, cash flow, and for avoiding HMRC trouble. Tackling payroll admin early is the best way to ensure a smooth tax year start.