A 0T tax code means you get no tax-free Personal Allowance from that job or pension. Your employer taxes every pound you earn, starting from the first pound.
Most people get £12,570 tax-free each year. With 0T, you lose that allowance on this income. So you can pay hundreds of pounds more tax than you need to.
The good news: 0T is often a temporary code. In many cases, you can get it fixed and claim the extra tax back.
What Does the 0T Tax Code Mean?
Your tax code tells your employer or pension provider how much tax to take from your pay. The number shows your tax-free amount, and the letter explains your situation.
In 0T, the “0” means a tax-free amount of zero. The “T” means HMRC needs to review other items in your tax record.
Unlike the BR tax code, 0T does not tax everything at one flat rate. Your employer still uses the normal tax bands:
| Taxable income in the year | Rate on a 0T code |
|---|---|
| First £37,700 | 20% (basic rate) |
| £37,701 to £125,140 | 40% (higher rate) |
| Over £125,140 | 45% (additional rate) |
These are the bands for England, Wales and Northern Ireland. In Scotland, the same code appears as S0T, and Scottish rates apply.
Why Has HMRC Given Me a 0T Tax Code?
HMRC or your employer uses 0T when they cannot confirm your Personal Allowance. These are the most common reasons.
1. You started a new job without a P45
When you start a job, your employer needs your P45 or a completed starter checklist. If they get neither, they often put you on 0T until HMRC sends a proper code.
2. Your income is over £125,140
Your Personal Allowance falls by £1 for every £2 you earn over £100,000. Once your income passes £125,140, the allowance is gone. HMRC then gives you 0T because you have no allowance left.
People earning between £100,000 and £125,140 face an effective 60% tax rate on that slice. Our high net worth tax planning team can help you reduce its impact, for example through pension contributions or Gift Aid.
3. Your allowance is used by other income
You might have a second job, a state pension or taxable benefits. HMRC can set your full allowance against that income. Your other job or pension then runs on 0T.
4. HMRC has outdated information
Sometimes HMRC simply has old or missing details. This often happens after a job change, a new pension or a gap in employment.
0T, 0T W1 and 0T M1: What Is the Difference?
You may see extra letters after your code, such as 0T W1, 0T M1 or 0T X. These mean your employer is using an emergency basis, also called non-cumulative.
- 0T (cumulative): Your employer works out tax on your total pay so far this tax year. When HMRC corrects your code, payroll gives back any overpaid tax automatically.
- 0T W1 / 0T M1 (non-cumulative): Your employer works out each week or month on its own. Overpaid tax does not come back through payroll straight away. You usually get it back once HMRC issues a correct cumulative code, or after the tax year ends.
How Much Extra Tax Could You Pay on 0T?
Here is a simple example for someone earning £2,500 a month.
| Normal code (1257L) | 0T M1 | |
|---|---|---|
| Monthly pay | £2,500.00 | £2,500.00 |
| Tax-free amount | £1,047.50 | £0.00 |
| Taxable pay | £1,452.50 | £2,500.00 |
| Income Tax (20%) | £290.50 | £500.00 |
That is £209.50 extra tax every month. Over a full year, the overpayment could be more than £2,500.
Is the 0T Tax Code Ever Correct?
Yes. 0T is the right code in some cases:
- Your income is over £125,140, so you have no Personal Allowance.
- You have two jobs and your allowance is correctly used against your main job. But a second job usually gets BR, not 0T, so check this carefully.
- HMRC has deliberately moved your allowance to other income, such as a pension.
If none of these apply to you, your code is probably wrong.
How to Fix a 0T Tax Code
Follow these steps to get a wrong 0T code corrected.
- Check your payslip. Confirm the code and look for W1, M1 or X after it.
- Give your employer your P45. If you have not done so already, hand it over or complete the starter checklist.
- Check your Personal Tax Account. Sign in online or through the HMRC app. Review your jobs, pensions and estimated income.
- Update your details with HMRC. Report any job that has ended or any income that is wrong. You can also call the HMRC Income Tax helpline.
- Wait for the new code. HMRC sends it to your employer directly. Your employer must use it from the next payday.
- Check your refund. On a cumulative code, the refund shows up in your next payslip. Otherwise, HMRC may send a P800 calculation after the tax year ends.
You can read more on tax codes on GOV.UK.
What If You Also File a Self Assessment Return?
If you are employed and self-employed, or you have rental income, your tax code and your tax return need to agree. A wrong 0T code can lead to overpaid tax through payroll and a confusing tax bill in January.
Our Self Assessment tax return service checks your code against your full income, so you pay the right amount once.
Employers: What to Do When a Staff Member Is on 0T
As an employer, you must use the code HMRC gives you. You cannot change it yourself. But you can help your staff:
- Ask new starters for their P45 or starter checklist on day one.
- Tell staff to contact HMRC if they think their code is wrong.
- Apply any new code from HMRC on the next payroll run.
If you need help, our payroll and pensions service handles tax codes, starter forms and HMRC notices for you.
Related Tax Code Guides
Frequently Asked Questions
Is 0T an emergency tax code?
0T is often used as an emergency code, especially with W1, M1 or X after it. Employers use it when they do not have your P45 or starter checklist details.
Will I get my money back if I was on 0T by mistake?
Yes. Once HMRC corrects your code, you usually get the overpaid tax back. It comes through payroll on a cumulative code, or through a P800 after the tax year ends.
How long does it take to change a 0T tax code?
After you update HMRC, your employer usually gets the new code within a few weeks. The change then shows on your next payslip.
What is the difference between 0T and BR?
Both codes give you no Personal Allowance. BR taxes all income at a flat 20%. 0T uses the normal tax bands, so higher rates apply as your income rises.
Can a pension be on a 0T tax code?
Yes. Pension providers often use 0T for the first payment, or when your allowance is used by your state pension or a job. Contact HMRC if the code looks wrong.
Need Help with Your Tax Code?
A wrong tax code can cost you hundreds of pounds before you notice. Our ACCA-regulated team checks your HMRC record, deals with HMRC for you and makes sure you get any refund you are owed.
Contact Direct Assist Accountants or call 020 3633 2018 to speak to our accountants in Slough today.