New tax year

For the 2025/2026 tax year, the personal allowance remains at £12,570. This means that the emergency tax code also remains at 1257L and you don't need to apply a change to all employees' tax codes. 

However, if you receive a P9 or P6 from HMRC, you need to update an individual employee's tax code.

 NOTE: If a tax code notice has an X after the code, this typically means you need to set the week 1 / month 1 flag. If you're not certain what tax code to enter, contact HMRC for advice. 

Unless a notice specifies you use the week 1 / month 1 flag, clear this for your employees before you process the first payroll of 2025/2026.

Update an employees tax code

There are different steps depending on how HMRC contact you. Follow the relevant steps below.

Received a letter

1. Select Payroll in the bottom left.
2. Double-click the required employee on your employee list.
3. Click the Employment tab.
4. In the tax code field, enter the tax code HMRC has stated.
5. Click Save.

If HMRC specified a date that the tax code is effective from, you can enter this in your software. Select the + button, then add and enter this date.

IR Secure Mailbox Notification

If you haven't used the HMRC Mailbox before, you may need to set it up with HMRC. To find out more, visit our IR Secure Mailbox and electronic notifications article.

1. Click E-submission, then click IR Secure Mailbox.
2. Select P9 notice.
3. Click Apply.

You've updated the employee's tax code, and you can now clear the week 1/month 1 flag.

Clear the week 1/month 1 flag

Unless HMRC advise otherwise, use a cumulative tax code at the start of a tax year. Follow the steps below to do this.

 TIP: Week 1/month 1 is non-cumulative. 

1. Select Payroll in the bottom left.
2. Select the required employees.
3. Click Tasks then click Global Changes.
4. Click Tax Codes then click Clear W1/M1 flag.
5. Click Yes then click OK.