Tax Code CD1 Explained
CD1 is the Welsh equivalent of the D1 tax code — all income from this source is taxed at a flat 45% additional rate, with no Personal Allowance. The C prefix identifies the taxpayer as a Welsh resident. Since Welsh Income Tax rates are identical to England rates for 2025-26, the take-home pay on CD1 matches D1. It applies when total income from all other sources already exceeds £125,140.
What does tax code CD1 mean?
Tax code CD1 is the Welsh version of D1. All income from this source is taxed at 45% with no Personal Allowance. Welsh rates match England for 2025-26, so take-home pay on CD1 is identical to D1.
Who gets tax code CD1?
Welsh residents with substantial income across multiple sources — where additional income from a second job or pension falls into the additional rate band (above £125,140 in total). The C prefix ensures the income is recorded as Welsh Rate of Income Tax for HMRC's devolved accounting purposes.
Welsh Rate of Income Tax: Wales sets its own Welsh Rates of Income Tax (WRIT) via the Senedd. For 2025-26, Welsh rates are identical to England rates (20% / 40% / 45%), so take-home pay is the same. The C prefix tracks revenue separately for the Welsh Government.
Take-home pay on tax code CD1 — 2025-26 examples
Examples below show Income Tax and take-home pay at common salary levels. National Insurance (NI) is also shown separately — NI is not affected by your tax code and applies on the same basis for all employees.
| Gross Salary | Income Tax | NI (est.) | Take-Home | Effective IT Rate |
|---|---|---|---|---|
| £20,000 | £9,000 | £594 | £10,406 | 45.0% |
| £25,000 | £11,250 | £994 | £12,756 | 45.0% |
| £30,000 | £13,500 | £1,394 | £15,106 | 45.0% |
| £35,000 | £15,750 | £1,794 | £17,456 | 45.0% |
| £40,000 | £18,000 | £2,194 | £19,806 | 45.0% |
| £45,000 | £20,250 | £2,594 | £22,156 | 45.0% |
| £50,000 | £22,500 | £2,994 | £24,506 | 45.0% |
| £60,000 | £27,000 | £3,211 | £29,789 | 45.0% |
| £75,000 | £33,750 | £3,511 | £37,739 | 45.0% |
| £100,000 | £45,000 | £4,011 | £50,989 | 45.0% |
Take-home = Gross − Income Tax − National Insurance. No pension, student loan or other deductions included. NI calculated at 8% between £12,570–£50,270 and 2% above. Effective IT Rate shows Income Tax as a percentage of gross salary.
Tax code CD1 vs 1257L: take-home comparison
How much more or less you take home on CD1 compared to the standard 1257L code at the same gross salary. A negative number means less take-home pay.
| Gross Salary | 1257L Take-Home | CD1 Take-Home | Difference |
|---|---|---|---|
| £20,000 | £17,920 | £10,406 | -£7,514 |
| £25,000 | £21,520 | £12,756 | -£8,764 |
| £30,000 | £25,120 | £15,106 | -£10,014 |
| £35,000 | £28,720 | £17,456 | -£11,264 |
| £40,000 | £32,320 | £19,806 | -£12,514 |
| £45,000 | £35,920 | £22,156 | -£13,764 |
| £50,000 | £39,520 | £24,506 | -£15,014 |
| £60,000 | £45,357 | £29,789 | -£15,568 |
| £75,000 | £54,057 | £37,739 | -£16,318 |
| £100,000 | £68,557 | £50,989 | -£17,568 |
Both columns include Income Tax and National Insurance. No pension or student loan deductions. 1257L = standard Personal Allowance of £12,570.
If you have tax code CD1, here's what you should know
- Your tax code appears on your payslip, P60, and any correspondence from HMRC about your PAYE tax.
- Your employer uses this code to calculate how much Income Tax to deduct from each pay period — they do not set it themselves.
- If your circumstances change (new job, change in benefits, marriage allowance), your code should update automatically — but it is worth checking.
- You can view and update your tax code online via your Personal Tax Account at gov.uk.
- If you think your code is wrong, contact HMRC on 0300 200 3300 or use the HMRC app.
- An incorrect tax code can mean you overpay or underpay tax — overpayments are refunded, underpayments are collected in future years.
Frequently asked questions
What does tax code CD1 mean?
CD1 is the Welsh equivalent of the D1 tax code — all income from this source is taxed at a flat 45% additional rate, with no Personal Allowance. The C prefix identifies the taxpayer as a Welsh resident. Since Welsh Income Tax rates are identical to England rates for 2025-26, the take-home pay on CD1 matches D1. It applies when total income from all other sources already exceeds £125,140.
Who gets tax code CD1?
Welsh residents with substantial income across multiple sources — where additional income from a second job or pension falls into the additional rate band (above £125,140 in total). The C prefix ensures the income is recorded as Welsh Rate of Income Tax for HMRC's devolved accounting purposes.
How much do I take home on tax code CD1 earning £30,000?
On tax code CD1 with a £30,000 salary, you take home £15,106 per year (£1,259 per month) after Income Tax of £13,500.
Is tax code CD1 correct for me?
Your tax code is set by HMRC based on your individual circumstances. If you believe your tax code is wrong, contact HMRC on 0300 200 3300 or check your Personal Tax Account at gov.uk. An incorrect code could mean you are paying too much or too little tax.
How do I change tax code CD1?
To change tax code CD1, contact HMRC directly on 0300 200 3300 or update your details via your Personal Tax Account at gov.uk. Your employer cannot change your tax code — only HMRC can issue a new one. Once HMRC updates your code, they will notify your employer and the change will appear on your next payslip.
Will I get a refund if tax code CD1 was applied in error?
If tax code CD1 was applied incorrectly and caused you to overpay Income Tax, HMRC will refund the overpayment. This typically happens automatically via a P800 tax calculation sent after the tax year ends (April). For a faster refund, contact HMRC directly once the correct code has been issued. Overpayments can also be reclaimed through Self Assessment if you file a return.
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