Published On: Sat, Nov 16th, 2019

Universal Credit UK: What tax code do Universal Credit claimants get? | Personal Finance | Finance

Universal Credit is a payment which may be claimed in order to help with living costs, and it may be paid to eligible claimants who are on a low income or out of work. If a person is employed, then the amount of Universal Credit they can get will depend on their earnings.

The work allowance is lower if a person gets help with housing costs, and in this situation it is £287 per month.

Otherwise, the monthly work allowance is £503.

Guidance from the Department for Work and Pensions (DWP) on Universal Credit is available online, and this includes information titled “Universal Credit and employers: frequently asked questions”, which was updated on August 12, 2016.

Information is compiled from questions asked by national employers and SMEs at Universal Credit events around the country.


Among them is the question of what tax code employers should put Universal Credit claimants on.

A tax code is used by employers and pension providers in order to work out how much tax to take from one’s pay or pension.

HM Revenue and Customs (HMRC) will tell them which code should be used.

In the guidance, the response on the matter is: “Universal Credit claimants are no different to any other employee.

The letter L means that the taxpayer is entitled to the standard tax-free Personal Allowance.

Meanwhile, the numbers in a person’s tax code tell the employer or pension provider how much tax-free income one gets in the tax year.

After working out what tax-free income one is allowed in a tax year, the last digit in the tax-free income amount is removed.

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