Tax Code 1131N in the UK – What Does it Mean? (2025)

Last Updated on: 2nd October 2024, 05:53 am

Navigating tax codes can be overwhelming, but understanding how they work is crucial for ensuring you are taxed correctly. In the UK, your tax code informs your employer how much tax to deduct from your salary.

The tax code 1131N is specifically designed for individuals who qualify for certain tax allowances and benefits, such as the marriage allowance.

This article will explain the workings of tax code 1131N for the 2024/25 financial year, its implications, and how you can ensure that your tax code is accurate and up to date.

What is a Tax Code, and How Does It Work?

A tax code is a series of letters and numbers provided by HM Revenue and Customs (HMRC) that helps employers calculate how much tax to deduct from an employee’s income.

The numbers represent your tax-free personal allowance, while the letters provide information about additional circumstances affecting your tax, such as benefits, allowances, or second jobs.

For instance, in tax code 1131N, the number 1131 represents £11,310, which is the tax-free portion of your income. For the 2024/25 tax year, this is slightly lower than the standard personal allowance of £12,570 due to adjustments related to specific allowances, like the marriage allowance.

How Are Tax Codes Used?

Tax codes are primarily used within the Pay As You Earn (PAYE) system. Employers and pension providers use your tax code to calculate how much tax to deduct from your earnings.

If your tax code is incorrect, you could end up paying too much or too little tax. Tax codes ensure that the correct amount of personal allowance is applied and that any additional circumstances, such as second income or marriage allowance, are reflected in the deduction calculations.

Employers receive tax codes directly from HMRC, but it’s always important to check that your tax code is accurate, especially if your circumstances change during the tax year.

Decoding Tax Codes

Decoding a tax code involves understanding what the numbers and letters represent. For example, in the case of tax code 1131N:

• 1131: This refers to a personal allowance of £11,310 for the tax year 2024/25. This means that the first £11,310 of your income is tax-free.
• N: The letter “N” signifies that you benefit from the Marriage Allowance, where part of your spouse’s personal allowance is transferred to you, reducing your overall tax bill.

By breaking down the numbers and letters, you can better understand your tax code and how it affects your take-home pay.

Keeping Your Tax Code Up to Date

It is essential to keep your tax code up to date. Any personal or financial situation changes, such as starting a new job, getting married, or receiving new benefits, may impact your tax code. Ensuring that your code is updated helps you avoid overpaying or underpaying taxes.

To verify your tax code, you can check your payslips, your personal tax account on the HMRC website, or your P60 form, which is issued at the end of the tax year.

Understanding Tax Code 1131N and its Implications (2024/25)

For the 2024/25 financial year, tax code 1131N continues to indicate that the taxpayer benefits from the Marriage Allowance and has a slightly reduced personal allowance.

The main implication of this tax code is that a portion of the individual’s personal allowance is transferred to their spouse or civil partner, reducing the taxpayer’s taxable income and resulting in lower tax deductions.

With tax code 1131N, £1,131 of the individual’s personal allowance is transferred to their spouse or civil partner. As a result, the individual’s personal allowance for the 2024/25 tax year is reduced to £11,310 from the standard £12,570.

This lowers the tax-free portion of the individual’s income, but their spouse or civil partner benefits from an increased personal allowance, effectively redistributing the tax-free amount between the couple.

By taking advantage of the Marriage Allowance and utilizing tax code 1131N, couples can optimize their tax situation. The redistribution of allowances allows them to reduce their overall tax liability.

However, it’s essential to stay updated on changes to the tax code, as tax code 1131N is specifically applicable for the 2024/25 tax year, and future adjustments may be made. Being aware of these implications helps ensure accurate tax calculations.

Key Points for 2024/25

• Tax code 1131N is assigned to individuals who transfer 10% of their personal allowance to their spouse or civil partner.
• £1,131 of the individual’s personal allowance is transferred, leaving them with a reduced allowance of £11,310.
• Utilizing tax code 1131N allows couples to redistribute their tax-free income, potentially reducing their total tax liability.
• It is important to monitor any changes to tax codes and ensure that your tax code is correct for accurate calculations and compliance.

Understanding the implications of tax code 1131N in the 2024/25 tax year allows individuals to make informed decisions regarding their tax planning. By making use of the available tax benefits like the Marriage Allowance, couples can effectively manage their tax obligations and improve their overall financial position.

Who is Eligible for Tax Code 1131N?

Under the tax code 1131N eligibility requirements, individuals must fulfill the following criteria:

• Individuals must qualify for the Marriage Allowance.
• Must be married or in a civil partnership.
• One partner must have an income below the personal allowance threshold (under £12,570 for 2024/25).
• The other partner must be a basic rate taxpayer (income falls within the 20% tax bracket).
• Couples cannot be higher-rate or additional-rate taxpayers.
• HMRC offers tools and resources on their website to help check eligibility.

The Marriage Allowance allows couples to maximize their personal allowances and optimize their tax benefits. By transferring a portion of their personal allowance, couples can effectively reduce their overall tax liability, giving them more financial flexibility.

How Does the Marriage Allowance Work? (2024/25)

Under the Marriage Allowance scheme, individuals who earn less than the personal allowance threshold can transfer 10% of their unused personal allowance to their partner.

The personal allowance threshold for the 2024/25 tax year is £12,570. If one partner’s income is below this amount, they can transfer £1,257 (10%) of their personal allowance to their partner.

For example, with tax code 1131N, the transferring partner’s personal allowance is reduced by £1,257, leaving them with a revised allowance of £11,310.

The receiving partner then benefits from an increased personal allowance, reducing their overall tax liability.

This allowance transfer can result in significant tax savings, especially for couples where one partner is a basic rate taxpayer (paying 20% tax) and the other has an income below the personal allowance threshold. The table below illustrates the key benefits:

The Marriage Allowance helps couples maximize their tax savings by redistributing unused personal allowances, reducing the total tax burden for the household.

This arrangement is particularly beneficial when one partner’s income is lower than the personal allowance threshold and the other is a basic-rate taxpayer.

By utilizing tax code 1131N, couples can optimize their overall tax position while taking advantage of available tax benefits for the 2024/25 financial year.

Benefits of Tax Code 1131N (2024/25)

Tax code 1131N provides several valuable benefits, particularly through the Marriage Allowance, allowing couples to save on taxes by transferring a portion of their personal allowance.

For the 2024/25 financial year, understanding these benefits can help couples make more informed financial decisions and optimize their tax efficiency.

Key Benefits of Tax Code 1131N

1. Reduces Overall Tax Liability: The primary benefit of tax code 1131N is that it allows couples to reduce their overall tax liability by transferring 10% of the personal allowance from the lower-income partner to the higher-income partner.

2. Transfers Unused Personal Allowance: If one partner earns less than the personal allowance threshold of £12,570, they can transfer £1,257 of their personal allowance to their partner. This effectively increases the recipient partner’s tax-free earnings.

3. Results in Tax Savings: The Marriage Allowance provided by tax code 1131N can result in significant tax savings. By reducing the taxable income of the higher-income partner, couples can lower the amount of tax they owe as a household.

4. Optimizes Financial Planning: By maximizing tax savings, couples can improve their overall financial planning. The extra funds saved through reduced tax liabilities can be allocated toward savings, investments, or other financial goals.

Example of Tax Code 1131N Benefits (2024/25)

In this example, without tax code 1131N, the couple’s total tax liability is £7,700. However, by utilizing tax code 1131N and transferring £1,257 of the personal allowance from Partner A to Partner B, Partner B’s taxable income is effectively reduced. As a result, the overall tax liability decreases to £7,400, resulting in a tax saving of £300.

Summary of Benefits

By leveraging the benefits of tax code 1131N in 2024/25, couples can maximize their tax efficiency, leading to lower tax payments and improved financial flexibility.

How to Apply for Tax Code 1131N?

Are you eligible for Tax Code 1131N and want to take advantage of the Marriage Allowance? Applying for Tax Code 1131N is a simple and straightforward process. To get started, follow the steps below:

1. Gather the Required Information

You will need your personal details, including your National Insurance number, as well as information about your spouse or partner.

2. Visit the HMRC Website

Go to the HMRC official website and access the section for marriage allowance applications.

3. Complete the Application Form

Fill in the online application form with the necessary details, ensuring all information is correct.

4. Submit the Application

Once the form is complete, submit it for processing. HMRC will review the application and notify you of the change in your tax code if you are eligible.

Changes to Tax Code 1131N in Recent Years

While tax code 1131N has remained consistent in its purpose, there have been minor adjustments in the personal allowance figures over the years.

For the 2024/25 financial year, the personal allowance has been adjusted to £11,310 in this code, slightly lower than the standard allowance due to the transfer of the marriage allowance.

How to Update Your Tax Code?

If you believe your tax code is incorrect or outdated, updating it is essential to ensure accurate tax deductions.

Incorrect tax codes can lead to overpayment or underpayment of taxes, so it’s crucial to act promptly. Here’s how to update your tax code for the 2024/25 tax year.

Steps to Update Your Tax Code:

1. Contact HMRC

If you think your tax code is incorrect, contact HMRC by phone or using their online services.

• HMRC Phone Number: 0300 200 3300 (Monday to Friday, 8 am to 6 pm)
• Outside the UK: +44 135 535 9022

Ensure you have your National Insurance number and tax details before calling.

2. Provide Necessary Information

When speaking to HMRC or using their online services, provide key information, including:

• Your current income and employment details.
• Any allowances (such as the Marriage Allowance).
• Details about any additional income, such as a second job or pension.
• Information about changes in your circumstances, such as marriage, job change, or retirement.

3. Follow HMRC’s Guidance

After submitting the required details, follow HMRC’s instructions. They may adjust your tax code based on your updated circumstances and provide you with a new tax code that reflects the correct deductions. HMRC typically sends a PAYE Coding Notice to notify you of the change.

4. Use the HMRC Tax Code Checker Tool

To confirm your updated tax code, use the tax code checker tool on the HMRC website. This tool helps you understand your tax code and explains how much tax you’ll pay under the updated code.

• HMRC Personal Tax Account: Sign in to your account at gov.uk to check your tax code online.

5. Understand Your Tax Code

Review the numbers and letters in your updated tax code to understand what they mean. For example:

• The numbers represent your personal allowance.
• The letters signify specific circumstances (e.g., N indicates Marriage Allowance).

This ensures you know how much of your income is tax-free and any allowances applied.

Why It’s Important to Keep Your Tax Code Up to Date?

Keeping your tax code up to date ensures you:

• Pay the correct amount of tax based on your current financial situation.
• Avoid underpayments or overpayments of tax, which could result in a tax bill or the need for a refund.
• Stay compliant with UK tax laws and avoid complications with HMRC.

How to Stay Informed?

• Regularly check your tax code on your payslip or through your Personal Tax Account.
• Update HMRC with any changes in circumstances, such as a change in salary, starting a new job, or entering a marriage or civil partnership.

By staying informed and using the tools provided by HMRC, you can ensure your tax code accurately reflects your current situation, helping you manage your tax obligations effectively.

Other Common Tax Codes and Their Meanings (2024/25)

In addition to tax code 1131N, several other common tax codes are used in the UK. Each has specific implications based on an individual’s income and circumstances. Here’s a brief overview of key tax codes for the 2024/25 tax year:

1. Standard Tax Code: 1257L

The 1257L tax code is the standard code for individuals receiving the full personal allowance of £12,570. It applies to those with one job or pension, meaning income up to £12,570 is tax-free, and any earnings above this threshold are taxed at 20%.

2. Basic Rate Tax Code: BR

 The BR tax code is used when all income is taxed at the basic rate of 20%, without a personal allowance applied. This code typically applies to individuals with multiple jobs or pensions, where the personal allowance is already used on another source of income.

3. Higher Rate Tax Codes: D0 and D1

• D0: This code applies to individuals taxed at the higher rate of 40% on income from additional jobs or pensions.
• D1: The D1 code is used when individuals are taxed at the additional rate of 45%, applicable to high earners with multiple sources of income.

Understanding these tax codes helps ensure you’re paying the correct amount of tax and managing your income efficiently.

Keeping track of your tax code ensures compliance with UK tax rules and minimizes overpayment or underpayment of taxes

Conclusion

Understanding tax code 1131N and its benefits can help you make the most of the allowances available in the 2024/25 financial year.

By ensuring your tax code is accurate, you can avoid potential tax issues and make sure you are not overpaying.

Whether you are eligible for the marriage allowance or need to update your tax code, staying informed about your tax situation is essential for managing your finances effectively.

FAQs on Tax Code 1131N

What Does the Letter ‘N’ Represent in a Tax Code?

The letter ‘N’ in a tax code signifies that the taxpayer is benefiting from the Marriage Allowance, which transfers part of their spouse’s personal allowance to them.

How Often Does HMRC Change My Tax Code?

HMRC typically updates your tax code annually, but it can also change if your personal or financial circumstances alter during the tax year, such as a new job or salary change.

Why Has My Tax Code Changed to 1131N?

Your tax code has changed to 1131N because HMRC has applied the Marriage Allowance, reducing your personal allowance by 10% to reflect the allowance transfer from your spouse.

Can I Be on the Wrong Tax Code?

Yes, it’s possible to be on the wrong tax code, especially if HMRC is unaware of changes in your income or circumstances. This can lead to overpaying or underpaying taxes.

How Does 1131N Relate to My Personal Allowance?

Tax code 1131N means your personal allowance is £11,310, which is slightly lower than the standard £12,570 due to the Marriage Allowance being applied to your income.

What Happens if I Overpay Taxes with Tax Code 1131N?

If you overpay taxes with tax code 1131N, HMRC will issue a refund after reviewing your tax records. You can also request a correction if you believe you’re on the wrong code.

What Is an Emergency Tax Code, and How Does it Differ from 1131N?

An emergency tax code is temporary and applies when HMRC lacks full income details. Unlike 1131N, it doesn’t reflect allowances like the Marriage Allowance, potentially causing overpayment.