Coding Notice (P2)
UK tax glossary · Last reviewed: April 2026
HMRC sends a P2 Coding Notice when it issues or changes your tax code, typically at the start of each tax year or after a change in circumstances. The notice shows the components of your code: Personal Allowance, any benefits in kind, underpaid tax collected through PAYE, and adjustments.
Review your Coding Notice carefully. Common errors include outdated benefit values (e.g. the wrong car benefit), incorrect estimated employment income, and tax debts already paid being collected again. Errors often lead to under- or over-collection for a full year.
You can view and challenge your tax code via your Personal Tax Account at gov.uk. Changes are usually actioned within one to three payroll periods.
Common questions
Do I have to do anything when I receive a P2?
You should check the figures are correct. If your code looks right, no action is needed. If it is wrong, contact HMRC through your Personal Tax Account or by phone.
Why has my tax code reduced and my take-home pay fallen?
HMRC may have added a taxable benefit, collected an underpayment from a prior year, or received updated information about untaxed income such as rental or savings income.
Related resources
TaxHelper provides general information based on published HMRC rates and guidance. It is not regulated financial or tax advice. For decisions involving significant sums, complex circumstances, or if you are unsure, speak to a qualified accountant or HMRC directly.