In the UK, every person paid under the PAYE scheme is allocated a tax code by HM Revenue and Customs.
Tax codes are usually adjusted once a year to take into account any changes made in the National Budget, but can be altered more often to reflect an employee's circumstances.
Tax codes are passed between periods of employment by a P45, which is generated when a person leaves a job.
If a P45 is mislaid or not supplied at the end of a period of employment, a P46 can be filled out in order to determine which tax code is applicable to a person.
Non-standard codes are used when usual tax free allowances do not apply.