For 2026/27 an employee is entitled to the standard personal allowance of £12,570 and has taxable benefits of £3,260 to be collected through the code. What is the tax code?
Answer and explanation
Correct answer: A. 931L
- Step 1: Reduce the allowance by the benefits: £12,570 - £3,260 = £9,310.
- Step 2: Drop the last digit and add the letter: 931L.
Answer
931L.
Why not the others: 1257L is the standard code with no benefit deduction. 1583L adds the benefits instead of subtracting them. 933L rounds the allowance up; the code is found by dropping the last digit, giving 931.
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