If your payslip shows a tax code ending in N, it means you’ve transferred 10% of your Personal Allowance to your spouse or civil partner through Marriage Allowance. For the 2026/27 tax year that’s £1,260 of allowance moved across, which lowers your own tax-free amount and cuts your partner’s tax bill by up to £252 a year.1GOV.UK. Marriage Allowance Your partner’s code gains an M suffix to show they’re receiving the extra allowance.2GOV.UK. Tax Codes: What Your Tax Code Means
Every PAYE tax code combines a number (your tax-free allowance divided by 10) with a letter that tells your employer how to work out deductions. The N specifically flags you as the person giving up part of the allowance.3GOV.UK. PAYE Manual Once set up, the transfer rolls over automatically each April until one of you cancels it.4GOV.UK. Marriage Allowance – How to Apply
How the N Code Affects Your Take-Home Pay
The standard Personal Allowance for 2026/27 is £12,570, which gives most employees a code of 1257L. Transferring £1,260 drops your tax-free amount to £11,310, and your code becomes 1131N or something similar, depending on any other adjustments HMRC has applied.5House of Commons Library. Direct Taxes: Rates and Allowances
What that means for you depends on how much you earn. If your income is below £11,310, the transfer costs you nothing. You weren’t going to use that slice of allowance anyway, so passing it to your partner is a straight win for the household. If you earn between £11,310 and £12,570, you’ll pay 20% tax on the portion above £11,310, but your partner still saves up to £252, so the household is still ahead overall.1GOV.UK. Marriage Allowance
On your partner’s side, their Personal Allowance rises from £12,570 to £13,830, their code gets the M suffix, and their employer withholds less tax each pay period. The full £252 works out to roughly £21 a month if they’re paid monthly.
Who Should Have an N Code
Marriage Allowance has rigid rules. All of the following need to apply:
- You are legally married or in a civil partnership. Cohabiting couples don’t qualify, however long they’ve lived together.
- You (the one with the N code) earn below the Personal Allowance, normally under £12,570.1GOV.UK. Marriage Allowance
- Your partner pays basic-rate tax. In England, Wales, and Northern Ireland that means income between £12,571 and £50,270.5House of Commons Library. Direct Taxes: Rates and Allowances
If your partner pays Scottish income tax, the upper limit is different. They qualify while paying the starter, basic, or intermediate rate, roughly income between £12,571 and £43,662. Above that Scottish threshold, neither of you can use the scheme.1GOV.UK. Marriage Allowance
Living outside the UK doesn’t disqualify you, as long as you receive a UK Personal Allowance.1GOV.UK. Marriage Allowance
What If the N Code Looks Wrong
If you never applied for Marriage Allowance, your partner may have started the application. Either partner can initiate the transfer, so the N can appear on your code without you personally submitting anything.
If you don’t believe anyone applied, or your circumstances have changed and the code should no longer be there, contact HMRC through your Personal Tax Account on GOV.UK or call the Income Tax helpline. HMRC will review the code and issue a corrected one if the N is there in error. Sorting this quickly matters because a wrong code means the wrong amount of tax comes out of every pay packet until it’s fixed.
Cancelling or Changing the Arrangement
You need to cancel Marriage Allowance if:
- Your relationship ends through divorce, dissolution of a civil partnership, or legal separation.
- Your income changes and you no longer meet the rules.
- You simply don’t want to claim any more.
Cancellation goes through the same GOV.UK portal used to apply.6GOV.UK. Marriage Allowance: If Your Circumstances Change The change can be backdated to the start of the tax year on 6 April, but backdating may mean one of you has underpaid tax for the year, which HMRC will collect later.
If your spouse or civil partner dies, the outcome depends on who held which code. If you were the one transferring the allowance (the N code), their estate keeps the higher Personal Allowance for that tax year and your allowance returns to the normal amount. If your partner was the transferor and they die, you keep the increased allowance until 5 April, after which it reverts to standard.6GOV.UK. Marriage Allowance: If Your Circumstances Change
Backdating a Missed Claim
If you were eligible in earlier years but the N code wasn’t on your payslip, you can backdate a claim for up to four tax years.7HM Revenue & Customs. Marriage Allowance Transfer For the earlier years, the recipient normally receives a refund cheque from HMRC. For the current year, both tax codes are adjusted so the saving comes through each pay packet.
Backdating is also available if your partner has died within the last four tax years, provided you were eligible during those years. Across four full years the combined refund can reach just over £1,000, so it’s worth checking even when the yearly figure sounds modest.