BR means Basic Rate — all income is taxed at 20% with no personal allowance applied. Usually applies to a second job, pension, or missing employer information.
20% on every pound -- that is what the BR tax code means. No Personal Allowance. No tax-free threshold. Every penny you earn from the income source carrying this code is taxed at the basic rate before it reaches your bank account. For most people, BR appears on a second job, a workplace pension, or a new job where HMRC has not yet received the right information.
When HMRC assigns BR to an income source, it means your entire £12,570 Personal Allowance has already been given to another employer or pension provider. There is nothing left for this source, so every pound is taxed at 20%.
This is the normal, correct code in several situations. But it can also appear incorrectly, and when it does, you are overpaying tax with every pay packet.
The five most common reasons you have BR:
1. You have a second job. Your main job carries 1257L (the full Personal Allowance). Your second employer receives BR because the allowance has already been used. This is correct as long as your combined income from both jobs stays within the basic rate band (under £50,270 in total).
2. You started a new job without giving your employer a P45. Without your P45 from your previous employer, your new employer does not know your tax history for the year. They may default to BR until HMRC issues a proper code, which can take several weeks.
3. You receive a workplace or private pension. If you have employment income and a separate pension, HMRC usually assigns the allowance to the larger income source and applies BR to the smaller one.
4. HMRC has not processed your starter checklist. When you join a new employer and complete the HMRC starter checklist (which replaced the P46), the information needs to reach HMRC and be processed. Until then, BR may apply by default.
5. HMRC records are out of date. If you left a previous job and the departure was not properly reported through Real Time Information (RTI), HMRC may still think you have two employers and allocate BR to the second.
If BR is wrong and you should have 1257L, you are losing tax relief on £12,570 of income. At the basic rate, that costs you exactly £2,514 per year, or roughly £210 per month in overpaid tax.
Here is a comparison of the tax on a £25,000 income with the correct code versus BR:
| Code | Personal Allowance | Taxable income | Annual tax | Monthly tax |
|---|---|---|---|---|
| 1257L | £12,570 | £12,430 | £2,486 | £207 |
| BR | £0 | £25,000 | £5,000 | £417 |
| Difference | -- | -- | £2,514 overpaid | £210/month |
That £2,514 is money you are entitled to keep. If you are on BR incorrectly for a full tax year, you can claim every penny back.
BR is not the only code that removes your Personal Allowance, but each one works differently:
| Code | Tax rate | When used |
|---|---|---|
| BR | Flat 20% on all income | Second job or pension (basic rate taxpayer) |
| D0 | Flat 40% on all income | Second job or pension (higher rate taxpayer) |
| D1 | Flat 45% on all income | Second income source (additional rate taxpayer) |
| 0T | 20%, 40%, or 45% depending on band | Emergency code or exhausted allowance; income taxed through all bands |
The key difference between BR and 0T is that BR applies a flat 20% regardless of how much you earn from that source, while 0T applies the progressive rate bands. If your second income is high enough to cross into the higher rate band, 0T would charge 40% on the portion above £37,700 (the basic rate band width), while BR would still charge 20% on everything.
BR is correct if:
BR is probably wrong if:
Step 1: Check if you have a P45 from your previous employer. If you started a new job and did not hand over your P45, give it to your current employer now. They will use it to correct your tax code and recalculate any overpaid tax for the current year.
Step 2: Complete the HMRC starter checklist. If you do not have a P45 (your first job, lost P45, or gap in employment), complete the starter checklist with your employer. This gives HMRC the information they need to issue the right code.
Step 3: Update your HMRC Personal Tax Account. Log in at gov.uk/personal-tax-account, go to "Check your Income Tax," and review your employment records. Remove any old employers that HMRC still has on file. Update your current employment details.
Step 4: Call HMRC if it persists. Phone the Income Tax helpline on 0300 200 3300 (Monday to Friday, 8am to 6pm). Tell them your BR code is incorrect and ask for an updated code. They can issue a new code over the phone, and your employer should receive it within a few days.
Step 5: Wait for the cumulative correction. Once your code changes to 1257L (or whatever is correct), your employer will recalculate your tax on a cumulative basis. This means your next pay packet will include a refund of any overpaid tax from earlier in the year. If the overpayment is large, you may receive significantly more than usual for one month.
Yes. If you were on BR incorrectly, you can reclaim every pound of overpaid tax. How you claim depends on timing:
Same tax year: Once HMRC corrects your code, your employer applies a cumulative adjustment and the refund comes through your pay automatically. No separate claim needed.
Previous tax year (tax year has ended): HMRC should issue a P800 tax calculation showing what you owe or are owed. If they do not, log into your Personal Tax Account and check your Income Tax history for the relevant year. You can also write to HMRC to request a review.
Going back further: You can claim overpaid tax for up to four previous tax years. For 2025/26, that means you could reclaim overpayments going back to 2021/22.
If you have been on BR for your only job all year, you could be owed over \u00a32,500 in overpaid tax. Do not leave it sitting with HMRC.
Assuming BR is always correct for a second job. It usually is, but if your combined income puts you into the higher rate band, your second job should carry D0 (40%) rather than BR (20%). If HMRC issues BR when it should be D0, you will underpay tax and face a bill at year end.
Not handing over your P45. This is the single most common reason people end up on BR incorrectly. Your P45 tells your new employer what tax you have already paid this year and what code to use. Without it, they have to default to BR or 0T.
Ignoring the code because it is "only temporary." BR may be temporary after starting a new job, but if you do not chase it, it can persist for months. Every month on an incorrect BR code costs you around £210 in overpaid tax at a £25,000 salary.
Having two employers both using 1257L. This is the opposite problem: if your second employer is using 1257L instead of BR, you are receiving double the allowance and will owe HMRC at year end. Check both payslips.
Not checking BR on a pension. When you retire or start drawing a pension while still employed, HMRC needs to split your allowance. If they assign BR to the wrong income source (your larger one), you pay more tax than necessary through the year.
Related tax codes: 1257L tax code | D0 tax code | D1 tax code | 0T tax code
TapTax connects to your bank, categorises expenses automatically, and submits quarterly updates to HMRC. Free plan, no card required.
