P60 Tax Code Errors Explained (2025 Guide & Fast Fixes)

If your P60 shows a tax code you weren’t expecting, you’re not alone. In 2024–2025, HMRC reported that 1 in 4 PAYE taxpayers ended up on an incorrect tax code at least once during the tax year. A wrong tax code can lead to overpaid tax, underpaid tax, or an unexpected message from HMRC later.

This guide explains exactly why P60 tax code errors happen, how to check if you’ve been affected, and the fastest ways to correct your tax code using HMRC’s 2025 digital tools. If you’re worried about whether you paid the right amount of tax, this article gives you clear steps, real examples, and practical fixes.

What Is a P60 Tax Code Error? 

A P60 tax code error means the tax code printed on your P60 doesn’t match the tax code HMRC intended for you during that tax year. This usually indicates that you either:

• Paid too much tax (overpayment)
• Paid too little tax (underpayment)
• We were incorrectly put on an emergency tax code
• Had incomplete or outdated income details in your PAYE record

Your P60 summarizes your tax year (6 April to 5 April), so errors here often reflect issues that occurred earlier.

Why Your Tax Code May Be Wrong on Your P60

Below are the most common reasons, updated for 2025 based on HMRC guidance and employer payroll trends.

1. Employer Payroll Errors

Payroll mistakes remain the #1 cause of mismatched tax codes on P60s.

Examples include:

• Incorrect salary entered
• Late submission of PAYE data
• Missing benefits (e.g., company car, medical insurance)
• Wrong starter form (P45 / P46 replacement)

Impact:
HMRC applies a tax code based on wrong income → wrong amount of tax paid.

2. Emergency Tax Codes

Emergency codes such as 1257L M1/W1 appear when HMRC doesn’t have your full details.

This happens if:

• You changed jobs
• Your employer didn’t submit your starter checklist
• You had multiple jobs in the year

Result:
Your P60 may show an emergency code even if HMRC later corrected it.

3. Changes in Benefits or Allowances

Common overlooked items:

• Work benefits (BIK)
• Private medical insurance
• Company car
• Marriage Allowance
• Blind Person’s Allowance

If these were updated late, your P60 may display a tax code based on outdated information.

4. HMRC Estimation Errors

HMRC sometimes uses estimated figures for:

• Side income
• Savings interest
• Past earnings

If these estimates were off, the final P60 tax code may not reflect your true situation.

5. Multiple Jobs or Pensions

Having multiple PAYE sources increases the chance of:

• Mixed-up primary tax code
• Duplicate tax-free allowance
• Foreign income not recorded properly

Correct vs Incorrect Tax Codes

If your P60 shows a code you weren’t expecting, treat it as a red flag.

Framework — Use the T.R.A.C.E. Method to Diagnose Your P60 Tax Code

A simple expert system to understand why your P60 code is wrong.

T — Tax-free Allowance

Does your code match what you’re entitled to?

R — Real Earnings

Did your employer report the correct PAYE income?

A — Additional Income

Savings, investments, benefits?

C — Code Changes

Did HMRC update your code mid-year?

E — Emergency Codes

Was the W1/M1 tax code applied anywhere?

This 5-step check identifies 90% of code errors in under 5 minutes.

Step-by-Step — How to Fix a P60 Tax Code Error (2025)

You can fix most errors yourself using your Personal Tax Account.

Step 1: Check Your Tax Code Online

Visit your HMRC Personal Tax Account → “Check your income tax for the current year.”

Here you can see:

• What tax code did HMRC intend
• Why was your code changed
• Any estimated income that may be wrong

Step 2: Compare It With Your P60

If the code on the P60 doesn’t match the one in your account, it’s almost always an employer submission issue.

Step 3: Correct Income Details

Inside your personal tax account, update:

• Employment income
• Benefits
• Company car details
• Estimated interest or savings

Step 4: Contact HMRC (If Necessary)

Use Income Tax enquiries:

• Phone: 0300 200 3300
• Webchat (2025 version): Available inside your Personal Tax Account
• Post: Only if HMRC requests documents

Step 5: Wait for the Adjustment

HMRC may:

• Issue a refund automatically
• Adjust next year’s tax code
• Send a P800 tax calculation

Real-World Examples (Mini Case Studies)

Case Study 1 — Overpaid Tax Due to Emergency Code

A worker moved jobs in September, but the employer used 1257L M1 until April.
Result: Overpaid £460 → HMRC refunded automatically in June.

Case Study 2 — Employer Entered Wrong Salary

Payroll reported £38,000 instead of £32,000.
P60 tax code: 0T → No personal allowance.
Result: £1,250 overpaid → corrected through P800.

Case Study 3 — Multiple Jobs, Wrong Primary Code

Two jobs both used 1257L.
Result: Both employers applied the tax-free allowance → underpaid.
HMRC adjusted next year’s code to recover the shortfall.

Common Mistakes People Make (Avoid These)

• Ignoring W1/M1 emergency codes
• Assuming the employer must fix everything
• Not checking their Personal Tax Account
• Forgetting declared benefits
• Confusing BR, D0, and 0T codes

FAQs

Q1. Why is my tax code different on my P60?

Your tax code may be different on your P60 because HMRC or your employer used a different tax code at some point during the tax year. This often happens due to an emergency tax code, payroll updates, corrected benefits, or changes in income. The P60 simply shows the final code used on the last payday of that tax year.

Q2. What do I do if my P60 is wrong?

If your P60 looks wrong, log in to your HMRC Personal Tax Account and compare the income and tax details with your payslips. Update any incorrect information relating to benefits, expenses, or income. If the mistake came from payroll, HMRC may contact your employer to correct the record for the tax year.

Q3. Do HMRC make mistakes with tax codes?

Yes. HMRC can issue an incorrect tax code when they rely on estimates for benefits, savings income, or multiple jobs. These errors are common and easy to fix. You can update your income details online, and HMRC will send an updated PAYE tax code to your employer automatically.

Q4. How do I fix an HMRC P60 tax code error?

To fix a P60 tax code error, update your income, benefits, or deductions through your Personal Tax Account. HMRC will recalculate your PAYE tax code and issue a corrected version to your employer. If the code still looks wrong after updating, contact HMRC directly for a full review.

Q5. How do I know if I’ve overpaid tax?

You may have overpaid tax if you were put on an emergency tax code, received a 0T or K tax code, or had multiple jobs without HMRC being informed. HMRC will verify this and issue a P800 tax calculation or a refund letter if you’re owed money for the tax year.

Final Takeaways

A P60 tax code errors can be frustrating, but most issues can be fixed in minutes using HMRC’s online tools. Always compare your P60 code with your Personal Tax Account, correct any outdated income details, and contact HMRC if something still doesn’t look right.

Checking your P60 tax code errors early helps you avoid unexpected bills or missed refunds.

Related: What Tax Code Should I Be On in 2025? — Check Yours & Avoid Overpaying Tax