The NT tax code explained

NT is the tax code for pay on which no income tax is deducted. GOV.UK says that you are not paying any tax on this income. HMRC uses it only in a short list of cases, so for an ordinary public sector employee seeing NT on a payslip is unusual and worth checking.

What NT does and does not cover

An NT code stops income tax being taken from that employment or pension through PAYE. National Insurance is a separate deduction, and HMRC’s manual describes employments where PAYE tax is not due but National Insurance contributions may still be payable.

It is also not the same as a 0T code, which removes your Personal Allowance and taxes every pound, or BR, which taxes all pay at the basic rate. The usual codes are covered in tax codes explained.

When HMRC uses it

HMRC’s PAYE manual says NT should be used only in the cases it lists. They include:

• statutory exemptions
• people exempt under a double taxation agreement, such as visiting teachers, foreign language assistants and students
• some ministers of religion, and members of religious orders who have signed over their earnings
• bankruptcy, from the date of the order to the following 5 April
• people who report earnings through Self Assessment because the job is a small part of their main trade or profession, for example some director’s fees
• short engagements in the TV and film industry, where the seven-day rule means employers need not deduct tax for those engaged for 6 days or less
• seafarers whose earnings qualify for the Seafarers’ Earnings Deduction, who can ask HMRC for a Seafarers’ NT code using form R44

Most of these have to do with where the person lives, how they are paid or what they do. None applies just because your pay is low.

Visiting teachers and other overseas staff

The one most relevant to schools and universities is the double taxation agreement route. Double taxation agreements can exempt visiting teachers, foreign language assistants and students from UK tax. If you think one applies to you, the country you live in matters and HMRC will want to see the reason. The manual says that where NT has been applied under a treaty, HMRC may write to check and can remove the code if the reason has ended. Speak to HMRC or your payroll team for your specific position.

What a seafarer’s request involves

The seafarer route shows how specific an NT request is. HMRC’s form asks for your National Insurance number, your Self Assessment Unique Taxpayer Reference if you have one, your employer’s name, PAYE reference and address, your start date and expected annual earnings. It also asks for details of any planned visits to the UK during the work, including the vessel name, type and registration number, and the date you think your Seafarers’ Earnings Deduction should start. You need to be provisionally entitled to the deduction for at least 365 days. HMRC considers the code once the form has been submitted and processed.

If you see NT and should not

If you are an ordinary employee and your payslip shows NT, no tax is being deducted from that pay. HMRC tells you to check your tax code if you think the tax is wrong. Use the Check your Income Tax online service or the HMRC app, and see how to check your tax code. If HMRC holds the wrong details, update them. If tax has gone unpaid, HMRC can collect it through a later code or a P800, as explained in underpaid tax.

If you have been given NT because of a treaty or another exemption and your situation changes, such as your residence or the end of a visit, tell HMRC. An employer cannot decide to switch the code on or off. HMRC tells the employer which code to use.

Asking for NT

You cannot ask for NT because you expect a low income. The reasons above are narrow. For seafarers, there is an online or postal form with a reference number so you can track the request. For anything else, contact HMRC with the details of the exemption you think applies.