Imagine opening your payslip and seeing your tax code drop from 1250L to 1185L. Your first thought might be: ‘Wait, am I paying too much tax now?’ or ‘Did HMRC get it wrong?’ Don’t panic—most of the time, this is just a routine adjustment. HMRC updates tax codes throughout the year to make sure your overall tax matches your income and benefits, spreading any difference to avoid a big bill at the end. If you’re wondering why your tax code changed from 1250L to 1185L, you can double-check your details anytime using your Gov.uk Personal Tax Account.
Understanding Tax Code 1250L vs 1185L in 2025
Your tax code essentially tells HMRC how much of your income is tax-free. With 1250L, you could earn £12,500 per year without paying income tax. Dropping to 1185L reduces your personal allowance to £11,850, which means slightly more tax is taken from each paycheck.
If you want a broader comparison of tax codes, our guide on the 1257L Tax Code explains another common adjustment and how it affects take-home pay.
Why Your Tax Code Might Drop
There are a few reasons HMRC may lower your tax code:
- Recovering unpaid tax from previous years – Instead of asking for a lump sum, HMRC spreads the adjustment across the year.
- Changes in benefits – Receiving perks like a company car or allowances can reduce your personal allowance.
- Pension updates – State pension or other pensions may affect your tax code.
- Multiple jobs or incomes – HMRC may split your personal allowance across jobs, lowering the code for one of your salaries.
- Temporary/emergency codes – Sometimes HMRC applies a temporary code while finalizing your records.
For a more detailed explanation, check out our guide on Why Has My Tax Code Changed?.
How a Lower Tax Code Affects Your Pay
Dropping from 1250L to 1185L means your take-home pay will be slightly smaller. For example, on a monthly salary of £2,500, the reduction in allowance might reduce your net pay by around £11–£15 per month.
While it may feel frustrating, this adjustment prevents a large tax bill at the end of the year and makes monthly budgeting more predictable. If you want to understand other tax code impacts, see our article on the BR Tax Code.
What You Should Do If Your Tax Code Changed From 1250L to 1185L
- Check your payslip carefully – Ensure your salary, benefits, and pensions are correctly recorded.
- Use HMRC tools – The Personal Tax Account can help verify your code.
- Seek professional advice if needed – If you have multiple incomes, complex benefits, or uncertainty about deductions, a tax advisor can save time and prevent mistakes.
FAQs
Q: Why has my tax code gone down in 2025?
A: Usually due to new income, benefits, pensions, or HMRC corrections from previous years.
Q: Why did my pension tax code change?
A: Pensions have separate codes, and HMRC adjusts them to make sure the total tax is accurate. See the 1257L Tax Code for an example.
Q: Can my tax code increase again from 1185L to 1250L?
A: Yes. HMRC may increase your allowance if your financial situation changes or past corrections are applied.
Q: What should I do if I think HMRC made a mistake?
A: Contact HMRC through your Personal Tax Account or speak to a tax professional to review your situation.
Q: Does having multiple jobs affect my tax code?
A: Yes, HMRC may split your personal allowance across jobs, which can lower the code for one of your incomes.
Final Thoughts
A drop from 1250L to 1185L in 2025 isn’t a warning sign. It’s HMRC’s way of aligning your tax with your income and benefits. Understanding why your tax code changed from 1250L to 1185L and regularly checking your payslips and Personal Tax Account helps you stay in control of your finances and avoid surprises.
Visit: Pure Magazine
