Tax Code N Explained: Marriage Allowance Transfer
If your payslip shows the letter N as part of your tax code — for example 1131N or N1257 — it means you have elected to transfer part of your Personal Allowance to your spouse or civil partner via the Marriage Allowance scheme. The N code is used by the lower earner who gives away part of their allowance.
How the N code works
Under Marriage Allowance, the lower earner can transfer 10% of the standard Personal Allowance (£12,570 × 10% = £1,257, rounded to £1,260) to their partner. This reduces the lower earner's tax-free amount from £12,570 to £11,310 — a reduction of £1,260.
In the tax code, this appears as:
- Lower earner (transferring): code reflects PA of £11,310 — shown as 1131N
- Higher earner (receiving): Personal Allowance of £13,830 — shown as 1383M
Who gets tax code N?
Tax code N is given to:
- The lower-earning partner in a marriage or civil partnership
- Someone who has applied for Marriage Allowance through HMRC (online, by phone, or by post)
- Both partners must be basic-rate taxpayers — neither can be a higher or additional rate payer
- The lower earner must earn below the Personal Allowance or be a non-taxpayer
Financial impact of the N code
The N code costs the lower earner up to £252 per year in extra income tax (£1,260 × 20%). But their partner with the M code saves the same £252 per year. The net household saving is therefore zero — the benefit is that the household's combined tax burden is reduced by £252 per year versus the alternative of the higher earner not receiving the transfer.
| Lower earner income | Tax without N code | Tax with N code | Extra tax paid |
|---|---|---|---|
| £8,000 (below PA) | £0 | £0 | £0 (N/A) |
| £12,000 | £0 | £0 | £0 (still below PA) |
| £15,000 | £486 | £738 | £252 |
| £20,000 | £1,486 | £1,738 | £252 |
| £25,000 | £2,486 | £2,738 | £252 |
The scheme makes sense when the lower earner does not use their full Personal Allowance — they are effectively giving away unused tax-free capacity that the higher earner can benefit from.
How to cancel the N code
If you no longer want to transfer your allowance, cancel via:
- Your HMRC Personal Tax Account at gov.uk
- Phone: 0300 200 3300
- The change will take effect at the start of the next tax year
Frequently asked questions
What does tax code N mean?
The N suffix means you have transferred 10% of your Personal Allowance (£1,260) to your spouse or civil partner via Marriage Allowance. Your allowance is reduced from £12,570 to £11,310, so your code will typically be 1131N.
Is tax code N bad?
Not necessarily. You pay up to £252 more tax per year, but your partner saves the same amount. As a household you are £252 better off overall compared to not claiming Marriage Allowance at all.
What is the difference between N and M tax codes?
N = the giver (lower earner, reduced allowance). M = the receiver (higher earner, increased allowance). Both are part of the same Marriage Allowance transfer — you cannot have one without the other.
Can I have N and M at the same time?
No. One partner has N (reduced allowance), the other has M (increased allowance). You cannot both give and receive the transfer simultaneously.