What Does M1 Mean on a Tax Code?

If you’ve noticed “M1” on your tax code, you might be paying more tax than necessary. The M1 designation signals that you're on an emergency tax basis, which could result in overpaying income tax. Understanding why this happens, how it affects your pay, and how to correct it can help you avoid unnecessary financial strain.

What is an M1 Tax Code?

The M1 (Month 1) marker is a temporary tax code applied to your income on a non-cumulative basis. This means each pay period is treated in isolation, ignoring previous earnings or tax payments for the year. Instead of calculating tax based on your total earnings since April, your employer applies tax deductions as if it’s your first month of the tax year—hence "Month 1."

How Does It Work?

Under a normal tax code, HMRC calculates your tax based on year-to-date earnings. However, with an M1 code, every payslip is taxed as if it’s the first time you’ve been paid that tax year. This can cause higher tax deductions, as you may not receive the full benefit of your tax-free personal allowance.

M1 tax codes usually look like:

• 1257L M1 (for most standard taxpayers)

• BR M1 (if all income is taxed at the basic rate, often for second jobs)

• D0 M1 (if all income is taxed at the higher rate)

• D1 M1 (if all income is taxed at the additional rate)

When is an M1 Tax Code Used?

HMRC applies an M1 tax code in situations where your tax status is unclear or your income details are not fully processed. Common reasons include:

• Starting a new job without a P45 from your previous employer

• Changing jobs midway through the tax year

• Returning to work after a period of unemployment

• Receiving additional income from a second job or pension

• Incorrect payroll processing by your employer

• Tax code adjustments when HMRC needs more information

Real-Life Example: How an M1 Tax Code Affects Pay

Let’s say Emily starts a new job in September and doesn’t provide her P45. Her employer assigns her a 1257L M1 tax code.

• If Emily earns £3,000 per month, her employer calculates tax as if this is her only pay for the year.

• The tax-free personal allowance (£12,570 per year) is not spread across her earnings cumulatively.

• She could end up paying more tax than necessary because previous earnings and tax payments aren’t considered.

This means Emily might notice her take-home pay is lower than expected. If she remains on this code for several months, she could overpay hundreds of pounds in tax.

I’m Still on an M1 Tax Code – What Should I Do?

If your tax code still includes M1, you should take action to correct it. Remaining on an emergency tax basis for too long means you could continue overpaying tax each month. Here’s what you need to do:

1. Check Your Payslip

Look for codes like 1257L M1, BR M1, D0 M1, or D1 M1. If you see “M1” or “X,” you’re being taxed on a non-cumulative basis.

2. Contact Your Employer

Ask your payroll department why you’re on an M1 tax code. If it's due to missing paperwork (like a P45), provide the necessary documents.

3. Submit a P46 or Update Your Details with HMRC

If you don’t have a P45, fill out a Starter Checklist (formerly P46), which tells HMRC about your new job and earnings.

4. Call HMRC Directly

If your employer can’t fix it, call HMRC at 0300 200 3300 with your National Insurance number and latest payslips. They can review your records and issue the correct tax code.

5. Check for a Refund

If you've overpaid tax due to an M1 code, HMRC may automatically refund you at the end of the tax year. However, you can request an earlier tax refund by submitting a P800 form or logging into your HMRC online account.

How to Change Your M1 Tax Code

Once HMRC updates your tax code, your employer will apply it in the next payroll run. Here’s how to ensure the correction is processed quickly:

• Provide any missing information (P45, P46, or pay details) to your employer.

• Confirm with HMRC that they’ve issued a new tax code.

• Monitor your payslips to ensure the correct code is applied.

• Request a tax refund if you’ve overpaid due to M1 deductions.

Final Thoughts

An M1 tax code is a temporary measure designed to ensure tax is deducted while HMRC assesses your correct tax position. While it prevents underpayment, it often leads to overpaying tax, so it’s crucial to take action if you find yourself on an M1 code for more than a couple of months.

If you’ve overpaid, HMRC will eventually refund you—but it’s better to resolve the issue sooner to avoid unnecessary deductions. Check your tax code regularly, keep your employer updated, and contact HMRC if needed.