What the C means
You pay the Welsh rates if you live in Wales. The Welsh Government sets them, and HMRC puts a C at the start of your tax code so your employer's payroll applies them. The rest of the code works as usual: 1257L is £12,570 of tax-free pay a year.
Your main home decides it, not your employer's address. If you have homes in Wales and elsewhere in the UK, GOV.UK says to tell HMRC which is your main home.
Welsh rates for 2026/27
| Band | Yearly income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic | £12,571 to £50,270 | 20% |
| Higher | £50,271 to £125,140 | 40% |
| Additional | Over £125,140 | 45% |
These are the same as England and Northern Ireland for 2026/27, so C1257L and 1257L give the same tax. The C still matters: it records that the tax belongs to Wales, and it will change the figures in any year the Welsh rates differ.
How PAYE applies C1257L on a payslip
- Pay for month 1: £3,000.00.
- Less tax-free pay of £1,048.26 leaves £1,951.74, rounded down to £1,951.
- Income tax at 20%: £390.20, the same as on 1257L.
- Employee National Insurance: 8% of £1,952, £156.16.
- Take-home before pension or other deductions: £2,453.64.
Figures from PayDocs' 2026/27 rule set, which follows HMRC's PAYE specification. Other Welsh codes follow the same pattern: CBR is 20% on all pay, CD0 40%, CD1 45%, and C0T gives no tax-free pay.
What the employer does
- Use the code HMRC sends, including the C. Don't drop it because the tax looks the same.
- If an employee moves to or from Wales, they update their address with HMRC, and HMRC sends you a new code.
- Show the full code on the payslip.
Questions
Do I pay more tax on C1257L?
Not in 2026/27. The Welsh rates are the same as England's, so the tax is the same as on 1257L.
Why does my code have a C if the tax is the same?
Because the Welsh Government sets the Welsh rates, and they could differ from England's in a future year. The C tells payroll which rates apply.
I live in England but work in Wales. Should I have a C?
No. The Welsh rates depend on where you live, not where you work.
Sources
- GOV.UK — Income Tax in Wales
- GOV.UK — Tax codes: what your tax code means
- HMRC — Rates and thresholds for employers 2026 to 2027
- GOV.UK — Understanding your employees' tax codes: what the letters mean
- HMRC — Specification for PAYE Tax Table Routines, version 24.0
Official sources checked 4 October 2026. This guide explains how pay documents work; it is not tax or legal advice.
