An NT tax code means No Tax, no Income Tax is taken from that income at all. It is the opposite of codes like D0 or 0T: rather than removing your allowance, NT switches PAYE off entirely for that source.
This is part of our UK tax codes explained series.
What does an NT tax code mean?
NT tells your employer or pension provider to pay you without deducting any Income Tax. It does not mean the income is necessarily tax-free for good, only that tax is not collected through this PAYE source. In some cases tax is dealt with another way (for example through Self Assessment), and in others the income genuinely is not taxable in the UK.
When is an NT code used?
NT is applied only in specific situations, including:
- Someone who is not UK tax resident and whose income is taxable elsewhere under a double-taxation arrangement.
- Certain pension situations where tax is accounted for separately.
- People in bankruptcy, where deductions are handled differently for a period.
- Some seafarers and other special cases recognised by HMRC.
Because NT removes all tax, HMRC issues it carefully. If you see NT and are not sure why, it is worth confirming it is correct, an NT code applied in error can leave you with an unexpected bill later.
What to do if the code is wrong
If you think your tax code is wrong, do not just wait, an incorrect code is corrected from the date HMRC updates it, and any over- or under-payment is squared up afterwards. Steps to take:
- Check your latest tax code notice (the "PAYE Coding Notice", form P2) in your HMRC personal tax account. It shows how the code was built up.
- Compare it to your real situation, one job or several, any benefits in kind, untaxed income, or earlier-year underpayments being collected.
- Be sure NT is genuinely right for you, it means no tax is being collected here, so an error works against you at the end of the year, not in your favour.
- Tell HMRC if anything is out of date, online, via the HMRC app, or by phone. They will issue a revised code to your employer.
- Watch your next payslip to confirm the new code has been applied and any refund has come through.
Frequently asked questions
Does an NT code mean I pay no tax at all?
It means no tax is taken from that particular income through PAYE. You may still owe tax on it another way, for example through Self Assessment, depending on your circumstances.
Can I ask for an NT code?
No, NT is issued by HMRC only in specific situations such as non-residence or particular pension cases. It is not something you simply request.
Is NT the same as a tax-free allowance?
No. A tax-free allowance (like the £12,570 in 1257L) sits within a normal code; NT switches off tax for an income source entirely, for a specific reason.
Think your tax code is wrong? It is one of the most common payroll errors, and HMRC will not always spot it for you. Zmartly's Self Assessment and personal tax team can check your code against your circumstances and deal with HMRC on your behalf. Get in touch for a free review, or book a free Tax Health Check.
