A BR tax code means HMRC taxes all income from that source at the basic rate of 20%, with no tax-free Personal Allowance. BR stands for “Basic Rate.” It is applied when the Personal Allowance is already being used elsewhere, or when there is not yet enough information to issue a full, personalised code. This happens most often on a second job, a new employment, or a pension that starts partway through the tax year.
This guide explains why this code is issued, how it affects take-home pay, and the exact steps to correct it.
Why Have I Been Given This Code?
A BR code usually appears in one of the following situations:
- A second job or pension: the Personal Allowance is already allocated to a primary income source
- A new job where the employee confirms other income: the starter checklist shows another job or pension, so the new employer applies BR
- A processing delay: HMRC has not yet updated income details, so payroll uses a temporary code while it reviews the record
- A missing instruction: the employer has not received code details from HMRC in time for the first payroll run
In most of these cases, BR works as a temporary placeholder. It lasts until HMRC issues the correct, personalised code.
How Much Tax Will I Pay?
HMRC charges a flat 20% on all income under this code, regardless of the total amount earned. No Personal Allowance offsets the first portion of income. This differs from a standard code such as 1257L, where the first £12,570 of annual income stays tax-free before the basic rate applies. It also differs from a K tax code, which adds untaxed income to pay rather than simply removing the allowance.
For someone whose only income falls under this code, the result is usually an overpayment, since no allowance reduces the tax due on that income.
BR Versus 0T: What Is the Difference?
BR taxes all income at 20% only, while 0T taxes income across every band with no Personal Allowance. Both are often called emergency codes, although HMRC’s official emergency code is 1257L on a non-cumulative basis (shown as W1, M1, or X).
- BR uses the basic rate band alone, whatever the level of pay.
- 0T applies basic, higher, and additional rates as pay rises, so it can produce higher deductions than BR on larger incomes.
Employers generally use 0T when they have no tax code information at all. They apply BR when the employee confirms that a Personal Allowance is already in use elsewhere, such as on a primary job.
Will I Get a Refund?
Whether a refund is due depends on total income across all sources for the tax year. If this code results in too much tax overall, HMRC repays the overpaid amount once the correct code applies, or after the year ends through a P800 calculation or a Self Assessment return. This situation is common on a second job or a new pension, where the temporary code ignored an available Personal Allowance.
Where the code applies correctly, no refund is due. For example, on a genuine second income where the Personal Allowance already covers the primary job, the deduction simply reflects the correct liability.
How Do I Get It Changed?
Correcting this code means contacting HMRC directly, either through the Personal Tax Account or by phone. HMRC needs:
- Details of every current income source, including employers and pension providers
- Confirmation of which income source should carry the Personal Allowance
- A National Insurance number, for identity verification
Once HMRC reviews the case, it sends an updated code to the relevant employer or pension provider. Payroll then adjusts automatically from the next pay run, which usually corrects both the ongoing deduction and any refund owed for the current tax year.
Employers can reduce these problems by checking starter information and tax codes as soon as a new employee joins. Businesses using our managed payroll service in Slough have new starter codes checked before the first pay run.
Does This Apply to a Second Job?
A BR code is one of the most common outcomes of starting a second job. HMRC normally allocates the full Personal Allowance to the main income source and applies BR to the second job, so that income does not go untaxed.
Where the main job pays less than the Personal Allowance, the unused part can be moved to the second job. This requires asking HMRC to split the allowance between the two codes.
Contractors and directors often have income from more than one source, including dividends alongside a salary. Reviewing tax codes at the start of each tax year confirms the allowance sits against the right source, and the mix of salary and dividends decides how much of the allowance a director’s salary actually uses.
Can I Claim Back an Overpayment?
Yes. Two main routes exist for reclaiming an overpayment. The first is a tax code correction, which adjusts future payroll deductions. The second is a Self Assessment tax return, which reconciles total income and tax paid for the full year. For people outside Self Assessment, HMRC reconciles the year automatically and sends a P800 calculation when a refund is due.
HMRC calculates any refund against total income and tax paid across the whole tax year, not against a single payslip in isolation.
Frequently Asked Questions
What does BR mean on a payslip? It means income from