The 1182L tax code means HMRC has set your tax-free personal allowance at £11,820 for the year, which is £750 below the standard £12,570 that most employees receive. Your employer or pension provider uses this code to work out how much Income Tax to take off before your pay reaches you. The reduction almost always reflects a taxable benefit from work, a bit of untaxed income, or a small underpayment from an earlier year that HMRC is quietly recovering through your pay.
How to Read the Number and the Letter
A PAYE code has two parts and each does a specific job. The number is your annual tax-free income with the last digit removed. Take 1182, multiply by ten, and you get £11,820. That is what you can earn in the tax year before Income Tax starts. The letter L confirms you are on the standard personal allowance structure, just adjusted downward from the default.
The code most people see is 1257L, which gives the full £12,570 allowance. A lower number means HMRC has taken something off. A higher number means something has been added, usually a work-related expenses claim.
Why Your Allowance Has Been Reduced by £750
HMRC starts with the standard personal allowance and then subtracts the estimated value of anything you receive that has not already been taxed. The gap between 1257L and 1182L is £750, and that £750 typically traces back to one of a few things:
- A taxable benefit from your employer, such as private medical insurance, a company car, or fuel for personal use. HMRC estimates its yearly value and takes that off your code.
- Untaxed income, such as savings interest above your Personal Savings Allowance or small amounts of freelance earnings, collected through the code instead of a Self Assessment return.
- A previous year’s underpayment under £3,000, spread across the current year by reducing your allowance.
- The High Income Child Benefit Charge, if you or a partner earns between £60,000 and £80,000 and Child Benefit is claimed.
Your coding notice, form P2, sets out exactly which deductions HMRC has applied to reach 1182L. If the reason no longer holds (the company car has gone back, the underpayment is settled), the code is out of date and worth correcting.
What It Costs You Compared to the Standard Code
With 1182L, you can earn £11,820 across the tax year before any Income Tax applies. Your employer spreads that across pay periods, so roughly £985 a month or £227 a week comes through tax-free. Everything above the threshold is taxed at the rate for the relevant band.
For the 2025/26 tax year in England, Wales, and Northern Ireland, the bands are:
- Basic rate at 20% on income from £12,571 to £50,270
- Higher rate at 40% on income from £50,271 to £125,140
- Additional rate at 45% on income above £125,140
Because 1182L gives you £750 less tax-free income than 1257L, you pay tax on an extra £750 across the year. At the basic rate that is about £150 more Income Tax over twelve months, or roughly £12.50 a month. It is small enough that the difference rarely jumps off a payslip, which is exactly why the code is worth checking rather than assuming it is right.
How to Check the Code Is Correct
The fastest check is HMRC’s “Check your Income Tax” service on GOV.UK. It shows your current code, the estimated income HMRC is using for each job or pension, and lets you report anything that has changed. The HMRC app does the same on a phone. If you would rather speak to someone, the Income Tax helpline handles coding queries directly.
To verify the figure, put your most recent payslip next to your P2 coding notice. The P2 itemises every allowance and every deduction HMRC has folded into the code, so you can see whether the £750 reduction still matches your circumstances. If a benefit has ended, or an underpayment has already been settled, the code needs updating.
When you report a change through the online service or by phone, HMRC updates the code and tells your employer within 15 working days. One timing point: if you have just started a new job, wait 35 days before contacting HMRC, because it takes time for the new employer’s payroll records to reach them.
If the Code Turns Out to Be Wrong
A wrong code means you have paid too much or too little tax over the year. After the tax year ends, HMRC reconciles the figures and sends a P800 calculation letter if they do not match. The letter either confirms a refund or tells you what extra tax is due.
If you have underpaid and the amount is under £3,000, HMRC normally collects it by adjusting your code for the following year. The extra tax comes off gradually across twelve months of pay rather than as a lump sum. Above £3,000, or where there is no employment income to adjust against, HMRC writes to you about other ways to pay.
Overpayments run the other way. HMRC either sends a cheque or lets you claim the refund online. Catching a wrong code early avoids months of overpaying quietly, or a surprise bill later. Checking the code at the start of each tax year, and whenever your circumstances change, keeps things straight.