Tax · United Kingdom
Tax Code Notice (P2) — how HMRC explains your PAYE tax code
A P2 explains your PAYE tax code — the code your employer or pension provider uses to work out how much tax to take from your pay. It is informational — nothing to pay — but a wrong code changes every payslip.
How serious: routineAlso called: P2, PAYE Coding Notice, Notice of coding, Tax code change letter
The P2, also called a PAYE Coding Notice, explains the tax code applied to your wages or pension. Per HMRC's manual it is 'a personalised communication telling the customer what makes up their code(s) and provides an explanation of each coding item'.
You get one when your code is set or changed — after a job change, a company benefit, or when an underpayment is being collected through your code. Since 2015 it lists 'all live employments and/or pensions on a single form'.
The letter demands nothing. The code takes effect from the date HMRC applies it, and your employer or pension provider uses it automatically. The reason to read it is accuracy: if an item is wrong, the wrong amount of tax comes out of every payslip.
Who sends it
HM Revenue and Customs (HMRC), the UK's tax authority. HMRC sets tax codes; employers and pension providers apply them.
An HMRC letter headed 'Tax Code Notice' (form P2), showing a code like 1257L or K475, an arithmetical breakdown of allowances and deductions, and notes explaining each item. It lists all live employments and pensions on a single form.
The deadline
There is no formal response deadline. The code takes effect from the date HMRC applies it.
If you do nothing
The new code is applied by your employer or pension provider automatically and tax is deducted accordingly. If the code is wrong and you say nothing, the wrong amount of tax comes out of every payslip — gov.uk: 'It's your responsibility to make sure you're paying the right amount of tax.' Over- or underpayments are usually only corrected later through a P800 calculation or Simple Assessment.
How it escalates
- 01The stated tax code is applied to your wages or pension as printed.
- 02If it was wrong, you over- or underpay tax through the year; an underpayment later comes back as a P800 or Simple Assessment bill, potentially collected through a reduced future tax code.
How to respond
Response types
- Ask for clarificationUpdate or correct your tax code (Check your Income Tax online service)
- File the objectionObjection to the code determination, and appeal to the tribunal (reg. 18) · Income Tax (PAYE) Regulations 2003 (SI 2003/2682), reg. 18 (objections and appeals against a code determination)
Where and how
- Check your Income Tax for the current year - update your tax code
- Telephone
- Post (first class / ordinary mail)
What makes it count
Nothing is due by return and the code takes effect whether or not you reply, so speed matters only in practice: every payday under a wrong code deducts the wrong tax, and correcting it early avoids waiting for a P800 or Simple Assessment to unwind the difference. Use the online service, which records the change and is the route GOV.UK treats as quickest; allow 15 working days for HMRC to issue the new code to the employer before chasing, and 35 days after starting a new job before contacting HMRC at all.
Common questions
Do I need to do anything?
Not if everything on it is correct. No reply is needed. The code is applied automatically by your employer or pension provider.
What if the code is wrong?
HMRC can be contacted by phone or letter. Left uncorrected, the wrong tax comes out of every payslip until a later P800 or Simple Assessment puts it right.
Why did my code change?
The notes on the P2 explain each item. Common reasons are a job change, a company benefit, or an underpayment being collected through the code.
Sources
Facts verified against the sources below on 28 August 2026.