What an NT tax code means, who actually gets one, and why it means no income tax comes off your pay. A plain-English guide for UK workers in 2026/27.
Most tax codes tell payroll how much of your pay to protect from tax. An NT code does something different: it tells them to take no income tax at all. Nothing. Your gross pay and your taxable pay are treated as if no income tax is due.
That sounds like a dream, and in the right circumstances it is completely legitimate. But an NT tax code is also one of the rarest codes you can be given, and if you have got one by mistake it can store up a bill for later. Here is what an NT tax code means, who actually gets one, and how to tell if yours is right.
NT stands for No Tax, and it instructs your employer or pension provider to deduct zero income tax from the payments they make to you.
Unlike a normal code such as 1257L, there is no number attached, because there is no allowance to apply and no slice to tax. The whole payment passes through free of income tax. It is the opposite end of the scale from a K code, which adds tax, or a BR code, which taxes everything at 20%.
This is the part people miss. An NT tax code switches off income tax, not everything.
National Insurance is calculated separately, using your earnings and your category letter, and it is not controlled by your tax code at all. So most employees on an NT code still pay National Insurance in the normal way. If you earn above the threshold, which is £242 a week or £1,048 a month for 2026/27, you will still see National Insurance coming off your payslip even with NT next to your name.
Student loan repayments and pension contributions also run on their own rules, so those can still be deducted too. NT is specifically and only about income tax.
HMRC does not hand these out casually. The main situations where an NT code is correct:
Non-residence and double taxation. If you are not resident in the UK for tax purposes, or a double-taxation agreement means your income is taxed in another country rather than here, HMRC can issue an NT code so you are not taxed twice on the same money. This is the most common reason, and it usually follows a claim you or an adviser have made.
Bankruptcy. When someone is made bankrupt, HMRC may issue an NT code for the rest of that tax year. The income tax that would normally be deducted is instead dealt with as part of the bankruptcy, so payroll is told to take none.
Certain pension and estate payments. Some payments made after a death, or particular pension arrangements, are paid without income tax deducted at source, and an NT code can be used to make that happen. The tax position is then settled another way.
Seafarers and specific occupational reliefs. A narrow set of workers whose income qualifies for a specific relief may be put on NT so the relief is applied through payroll rather than reclaimed later.
The common thread is that in every one of these cases, HMRC has looked at your circumstances and decided no income tax is due on that income through PAYE. NT is the instruction that carries out that decision.
You work on a UK contract but you have moved abroad and HMRC has accepted that you are non-resident for the year, with your salary taxable in your new country under a double-taxation agreement. HMRC issues your UK employer an NT code.
Compare that with the same £3,500 on a standard 1257L code, where you would lose several hundred pounds a month in income tax. The difference is not a loophole. It is HMRC recognising that the income is taxed elsewhere, so charging it here as well would be double taxation.
It is easy to mix NT up with two other codes that also look unusual on a payslip, so it helps to see them side by side.
A 0T code gives you no personal allowance and taxes everything from the first pound, usually at 20% and then higher rates as your pay rises. It often appears when payroll has no details for you, and it tends to overtax rather than undertax. A BR code taxes all of the income at the basic rate of 20%, which is common on a second job where your allowance is already used up elsewhere.
NT is the mirror image of these. Where 0T and BR take tax, NT takes none. If you meant to query why you were being overtaxed and you actually have 0T or BR, those are the posts to read instead. If your payslip genuinely shows zero income tax, NT is the code in play.
Because NT means literally no income tax, getting one you should not have is expensive in the long run. If a payroll error or an out-of-date instruction leaves you on NT when you actually owe tax, nothing is deducted through the year and HMRC will eventually reconcile your record and ask for the lot back in one go.
Warning signs worth checking: you are a normal UK-resident employee with one job and no special circumstances, but your payslip suddenly shows no income tax at all. Or you had a genuine reason for NT last year, such as a period of non-residence, but that reason has ended and the code was never changed back. In both cases you could be building up an unpaid bill without realising.
If you cannot explain why you are on NT, treat it as something to confirm, not a bonus to enjoy quietly.
Three steps, in order.
First, log into the HMRC app or your Personal Tax Account. It shows your current code, the income it applies to, and often the reason it was issued. If HMRC’s record agrees you should be on NT, you can relax.
Second, check your payslip against it. Confirm income tax is genuinely zero and see what else, such as National Insurance, is still being deducted. Make sure the code applies to the right employment if you have more than one.
Third, if anything looks off, contact HMRC on 0300 200 3300. If you have an NT code you cannot justify, it is far better to flag it now and get onto the correct code than to spend money that HMRC will later reclaim.
The NT code itself has not changed for 2026/27. It still means no income tax, and it is still issued only in the specific circumstances above. The personal allowance sits at £12,570 and the basic rate at 20%, so for anyone who is not entitled to NT, a normal code is what protects the right amount of pay.
The main practical change carried into 2026 is that HMRC issues and updates codes online-first. If your circumstances change, for example you return to UK residence, the update to move you off NT will show in your online account, and it is on you to make sure payroll then applies it.
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NT stands for No Tax. It tells your employer or pension provider to take no income tax at all from your pay. It is a legitimate code used in specific situations, such as certain non-resident arrangements, some pension or bereavement cases, and bankruptcy. It does not usually switch off National Insurance, which follows separate rules.
Neither on its own. It is simply an instruction to deduct no income tax, and it is correct only in specific circumstances. If HMRC has genuinely decided you owe no income tax on that income, NT is right and you keep more of your pay. If you received it by mistake, you could end up with a tax bill later, so it is worth confirming why you have it.
Usually yes. The NT code only controls income tax. National Insurance is worked out separately based on your earnings and category letter, so most employees on an NT code still see National Insurance deducted from their pay. Always check your payslip to see what has and has not been taken.
You do not set it yourself. HMRC issues an NT code to your employer or pension provider when your circumstances justify it, often after you or an adviser have explained the situation to them, for example a non-residence claim or a bankruptcy order. If you think you should have one, contact HMRC and explain why, rather than assuming it will appear automatically.
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A note on financial advice: NetPay UK calculates take-home pay based on official HMRC tax rules. This article reflects rules in force at the time of publication (2 August 2026). Tax rules change. For complex situations, consult a qualified UK accountant or visit gov.uk/income-tax.
