The M1 tax code — most commonly seen as 1257L M1 on a payslip — is an emergency tax code used in the UK when HMRC does not have enough information about your income to issue a standard cumulative code. The M1 part means your tax is calculated on a Month 1 basis, treating each pay period as if it were the first month of the tax year.
This often leads to overpaying tax in the short term. It is a temporary code that should be corrected as soon as the right information reaches HMRC or your employer.
What Does the M1 Tax Code Mean?
To understand the M1 code, it helps to first understand how a normal tax code works.
Under a standard cumulative code like 1257L, your tax is spread across the whole tax year. Your employer looks at everything you have earned since 6 April and calculates the tax owed to date. If you were overtaxed in May, the system corrects it automatically in June. It balances itself out month by month.
M1 breaks that process. The suffix M1 stands for Month 1, and it tells your employer to calculate tax as if every pay period is the start of the tax year. Your employer takes your monthly Personal Allowance — roughly £1,047.50 for the 2026 to 2027 tax year — applies it to that month’s pay, and calculates the tax owed. No account is taken of what happened in previous months. The calculation resets every single month.
This means if your income varies, or if you started a new job partway through the year, you may end up paying more tax than you should because the system is not looking at the full picture.
The M1 suffix is not a punishment or a sign that something is seriously wrong. It is a holding code. HMRC uses it when it needs more information before it can confirm your correct year-to-date position.
Why is M1 on the End of My Tax Code?
If you have spotted M1 at the end of your tax code on your payslip, it is almost always for one of these reasons:
You Started a New Job Without a P45
A P45 is the document your previous employer gives you when you leave a job. It tells your new employer how much you earned and how much tax you paid in the current tax year. Without it, your new employer has no way of knowing your year-to-date figures and cannot apply the cumulative tax calculation correctly. HMRC issues an emergency M1 code until it can verify your employment history through the Real Time Information (RTI) system.
You are Starting Your First Job
If this is your first ever employment in the UK, there is no prior tax history to work from. HMRC assigns an M1 code while it sets up your tax record. You will typically complete a new starter declaration with your employer, which confirms whether you have had another job or claimed benefits in the current tax year. This information allows HMRC to issue the right code.
You are Returning to Work After a Gap
If you have been out of employment for a period — perhaps due to illness, caring responsibilities, or a period of self-employment — your PAYE record may not be current. An M1 code gives your employer something to work with while HMRC updates your position.
HMRC Has Not Yet Updated Your Code
Sometimes the M1 code appears simply because there is a delay in HMRC processing information from your previous employer. This is common at busy times of the tax year, particularly around April and May when the new tax year begins.
If you see 1257L M1 on your payslip and none of the above situations apply to you — for example, you have been with the same employer for years — it is worth checking your Personal Tax Account online or contacting HMRC, as the code may have been changed in error.
Is 1257L M1 an Emergency Tax Code?
Yes. Any tax code with M1 at the end is classified as an emergency tax code. The 1257L part tells your employer to apply the standard Personal Allowance of £12,570, which is correct. But the M1 part changes how that allowance is used — on a non-cumulative Month 1 basis rather than across the full year.
It is worth understanding the difference between 1257L M1 and some of the other emergency codes you might come across:
| Code | Personal Allowance Applied | Cumulative? | Most Likely Scenario |
|---|---|---|---|
| 1257L M1 | £1,047.50 per month | No | New starter — monthly paid, no P45 |
| 1257L W1 | £241.73 per week | No | New starter — weekly paid, no P45 |
| 1257L X | Varies per period | No | Irregular pay cycles |
| BR | None | Yes | Second job — all income taxed at 20% |
| 0T | None | No | No info AND non-cumulative — highest tax risk |
The key takeaway from this table is that 1257L M1 is one of the less harmful emergency codes. You are still receiving a Personal Allowance each month — you are just not getting the benefit of any unused allowance from previous months. BR and 0T are more costly because no Personal Allowance is applied at all.
How Does 1257L M1 Affect Your Monthly Pay?
Here is a practical example. Suppose you earn £3,000 a month and your tax code is 1257L M1.
- Your monthly tax-free allowance is £12,570 divided by 12, which is £1,047.50
- Your taxable income for the month is £3,000 minus £1,047.50, which is £1,952.50
- Tax at 20% on £1,952.50 = £390.50 per month
Under a standard cumulative 1257L code, the calculation would be the same in this case because your income is consistent. The M1 code becomes a problem when your income is uneven across the year, or when you start mid-year having already earned elsewhere. In those situations, the M1 code does not account for tax already paid, which can lead to overpayment.
Current UK Income Tax Rates That Apply to Your Pay
Regardless of whether you are on an M1 code or a standard cumulative code, the same Income Tax rates apply to your income once the Personal Allowance has been used. The current rates for England, Northern Ireland, and Wales for the 2026 to 2027 tax year are:
| Band | Taxable Income (2026–27) | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Source: GOV.UK — Income Tax rates and Personal Allowances (tax year 6 April 2026 to 5 April 2027)
The difference with M1 is not which rates apply — it is how much of your Personal Allowance is used in each pay period. A cumulative code uses your full year-to-date allowance in every calculation. M1 resets to a fixed monthly slice each time.
If your income is above £100,000, your Personal Allowance reduces by £1 for every £2 you earn over that threshold. At £125,140 or above, the allowance disappears entirely and you pay tax from the first pound.
What is the Difference Between Cumulative and Non-Cumulative Tax Codes?
This is one of the most important things to understand about emergency codes. The table below compares how the two approaches work in practice:
| Standard 1257L (Cumulative) | 1257L M1 (Non-Cumulative) | |
|---|---|---|
| How tax is calculated | Across the full tax year to date | On each pay period in isolation |
| Personal Allowance used | Spread across all pay periods to date | 1/12th applied to each month only |
| Over/underpayment corrected? | Yes — automatically within the year | No — correction needed after year end |
| Best for | Employees with stable, predictable income | New starters or those with missing P45 |
| Risk | Low — system self-corrects each month | May overpay in early months of tax year |
The real-world impact of non-cumulative calculation becomes clear when you start a job in, say, October. By October, a standard cumulative code would take into account that you have had six months of unused Personal Allowance since April. That accumulated allowance reduces your tax bill significantly.
M1 ignores all of that and gives you only one month’s worth of allowance against October’s pay. If you were unemployed or self-employed from April to September, you could have a significant overpayment sitting in your HMRC account by the time the tax year ends.
If you start a new PAYE job in the second half of the tax year and end up on M1, it is particularly important to get your code corrected. The closer you are to April the worse the cumulative impact, and the more likely you are to have a meaningful refund waiting.
How Long Do You Stay on the M1 Tax Code?
There is no fixed time limit for the M1 code. In theory, you could stay on it for the rest of the tax year if no one takes action. In practice, most M1 codes are resolved within one to three months, either because:
- Your previous employer submits the final payroll figures to HMRC through RTI and HMRC updates your code automatically
- You provide your new employer with your P45 and the code is corrected at the next payroll run
- HMRC receives your new starter information and issues an updated coding notice
If you have been on an M1 code for more than two or three pay periods and nothing has changed, do not assume it will sort itself out.
Some cases do resolve automatically, but others sit uncorrected for months — especially when prior employment records are incomplete or when there has been a long gap in employment.
If you reach the end of the tax year on an M1 code, HMRC will normally reconcile your position through a P800 tax calculation letter, which will either confirm a refund is due or that you owe additional tax.
A refund will be paid directly to you. Any underpayment will normally be collected through an adjusted code in the following year.
How Do You Get Rid of the M1 Tax Code?
Getting off the M1 code is straightforward once you know the options. Here is a summary of the routes available and what each involves:
| Route | What to Do | Timescale |
|---|---|---|
| Give employer your P45 | Hand over P45 from previous job — employer updates payroll system | Next pay run |
| Starter checklist | Complete your employer’s new starter declaration if no P45 available | Next pay run |
| HMRC online account | Log into gov.uk Personal Tax Account — view and query your code | HMRC issues updated code in days |
| Call HMRC | Ring 0300 200 3300 with your NI number — request cumulative code | Code issued within 1–2 weeks |
| Wait for auto-update | HMRC reviews RTI submissions from your employer and may update automatically | Usually within 2–3 months |
The fastest route in almost every case is to give your employer your P45. If you do not have one — for example because your previous employer has not yet issued it or you left under difficult circumstances — the new starter checklist is the next best option.
This asks three simple questions about whether you have had another job, received benefits, or are starting your first job. The answers allow HMRC to issue the right code without needing the P45.
What If My P45 Is Wrong or Out of Date?
If your P45 shows figures from a job that ended some time ago and your circumstances have changed since then, it is still worth submitting it. HMRC will use it as a starting point and will update your code when the employer’s RTI submissions confirm your current position. If you think the P45 figures are incorrect, contact HMRC directly rather than ignoring it.
What If HMRC Issues a Refund?
If you have overpaid tax while on the M1 code, HMRC will usually issue a refund at the end of the tax year through the P800 process. If the overpayment is significant and you want it resolved sooner, you can contact HMRC during the tax year and ask them to review your year-to-date position.
In some cases, they will adjust your code to account for the overpayment through your remaining pay periods rather than waiting until April.
You do not need to wait until the end of the tax year to claim back overpaid tax caused by an M1 code. If you believe you have overpaid, call HMRC on 0300 200 3300 or use your Personal Tax Account at gov.uk to check your position and request an in-year correction.
Does the M1 Tax Code Affect Self-Employed People?
If your only income is from self-employment and you operate as a sole trader, you will not have a PAYE tax code at all. Tax and National Insurance are paid through Self Assessment, and M1 codes do not apply to that income.
However, M1 can become relevant for self-employed people in two situations:
- You also have PAYE employment income: If you are employed and self-employed at the same time, you will have a tax code for your employed income. If that code shows M1, everything in this guide applies to your employment pay.
- You are a limited company director paying yourself a salary: Director salaries are paid through PAYE. If you are a new director or have just set up a limited company, your payroll software may initially apply an M1 code until HMRC has confirmed your position. Make sure your company’s payroll is registered with HMRC before running the first salary payment.
FAQs About M1 Tax Code in the UK
Can I have M1 on a code other than 1257L?
Yes. Any tax code can carry the M1 suffix, not just the standard 1257L. For example, you might see 500L M1 if your Personal Allowance has been reduced for some reason, or BR M1 in certain circumstances. The M1 suffix always means the same thing: non-cumulative, Month 1 calculation.
Does M1 affect my National Insurance?
No. National Insurance is calculated entirely separately from your tax code. Your NI contributions are worked out on your gross earnings in each pay period using the NI thresholds, and the M1 code has no impact on them.
My payslip shows W1 instead of M1 — is that the same thing?
Very similar. W1 stands for Week 1 and operates on the same non-cumulative principle as M1, but it applies to weekly-paid employees rather than monthly-paid ones. If you are paid monthly, you will see M1. If you are paid weekly, you will see W1. The underlying issue and the fix are identical.
If I am on M1 for the whole tax year, will I definitely get a refund?
Not necessarily. If your income was consistent throughout the year and you started in April, the M1 and cumulative calculations would produce the same result. Whether you are owed a refund depends on your individual circumstances — how much you earned before and after joining the job, whether you had any unused allowance from earlier in the year, and whether there are any other adjustments on your record. HMRC’s P800 letter at year end will tell you where you stand.
Final Thoughts
The M1 tax code is a temporary measure, not a permanent problem. It tells your employer to calculate your tax on a Month 1 basis because HMRC does not yet have a complete picture of your income for the year. For most people, it resolves within a few pay periods once the right information is in the system.
The practical risk of M1 is that you may overpay tax in the short term — particularly if you started a new job mid-year and had unused Personal Allowance from the months before you started. The fix is usually straightforward: hand over your P45 or complete the new starter checklist, and make sure HMRC has your current employer’s details.
If you are unsure about your tax code, whether you are on the right one, or whether you are owed a refund from a prior year, the team at Micro Entity Accounts works with employed individuals, sole traders, and limited company directors across the UK. Getting your tax position right from the start is always easier and cheaper than resolving it after the fact.
Disclaimer: The content on MicroEntityAccounts is for informational purposes only and do not constitute tax or financial advice. We recommend consulting a certified tax professional or the HM Revenue and Customs Dept (HMRC) for accurate guidance. MicroEntityAccounts is not responsible for any decisions made based on the information provided.
