The BR tax code stands for Basic Rate and means all of your income from that source is taxed at 20% with no Personal Allowance applied. Unlike the standard 1257L code, BR gives you no tax-free income — every pound you earn through that job or pension is taxed from the first penny. HMRC most commonly uses it for a second job, a second pension, or as a temporary measure when it does not have enough information to issue a full-year code. This guide explains why you might have a BR code, whether it is correct, and what to do if it is costing you more tax than you should be paying.
What Does a BR Tax Code Actually Mean?
BR stands for Basic Rate. It is a tax code that tells your employer or pension provider to tax all of your income from that source at the basic rate of 20%, without applying any Personal Allowance.
Normally, every UK taxpayer receives a Personal Allowance — currently £12,570 for the 2026 to 2027 tax year — which is a tax-free amount of income before deductions begin. With a BR code, that allowance is not applied to that particular income source. HMRC assumes it is being used somewhere else, typically against your main job or pension.
This means BR is not inherently wrong — for a second job or second income source, it can be exactly the right code. The problem arises when BR is applied to your only or main source of income, because in that situation you lose your Personal Allowance entirely and pay significantly more tax than you should.
How Much Tax Does a BR Code Take?
Here is a straightforward example. Suppose you earn £1,500 per month from a second job:
- With 1257L code: You would receive a portion of your annual allowance, making roughly £1,048 of that tax-free each month. Tax at 20% on the remaining ~£452 = around £90.40 per month.
- With BR code: The full £1,500 is taxed at 20% = £300 per month.
In that scenario, the BR code costs you around £209.60 more per month compared to a 1257L code. Over a year, that is a difference of over £2,500. The money is not necessarily lost forever — if you are genuinely entitled to your allowance but it is being applied to the wrong job, you can reclaim the overpaid tax.
The BR code does not mean you will never get your Personal Allowance. You receive it once per tax year across all your income sources — HMRC allocates it to your main job. The BR code just confirms that this particular income source is not the one receiving it.
Is Tax Code 1257L the Same as BR?
No — 1257L and BR are very different codes with very different outcomes on your take-home pay. They both apply the basic 20% Income Tax rate, but 1257L gives you the standard Personal Allowance first, while BR does not.
| 1257L (Standard) | BR (Basic Rate Only) | |
|---|---|---|
| Personal Allowance applied | Yes — full £12,570 | No — zero allowance |
| Tax rate applied | 20% above £12,570 | 20% from the first pound |
| Cumulative (year-to-date)? | Yes | Yes (unless BR W1/M1) |
| Tax-free income | £12,570 | £0 |
| Used for | Main job / single income | Second job / pension / emergency |
| Monthly take-home on £2,000 | ~£1,869 (after IT + NI) | ~£1,600 (after IT + NI) |
| Risk of overpaying? | Low — if code is correct | Yes — if Personal Allowance unused |
The practical impact is significant. On the same gross income, BR results in a much lower net pay because every pound is taxed rather than only the pounds above £12,570. The only time BR produces the same result as 1257L is if your income is so high that your Personal Allowance would be tapered away anyway — which does not apply to most employees.
The current Income Tax bands for England, Northern Ireland, and Wales for the 2026 to 2027 tax year, confirmed by GOV.UK, are:
| Band | Taxable Income (2026–27) | Tax Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic Rate | £12,571 to £50,270 | 20% |
| Higher Rate | £50,271 to £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
Source: GOV.UK — Income Tax rates and Personal Allowances (tax year 6 April 2026 to 5 April 2027)
With a 1257L code, your Personal Allowance sits in the 0% band. Everything above £12,570 up to £50,270 is taxed at 20%. With a BR code, you skip the 0% band entirely and pay 20% from the very first pound.
Why Have I Got a BR Tax Code?
There are several legitimate and not-so-legitimate reasons HMRC might apply a BR code to your income. The most common are:
| Reason for BR Code | Who It Affects | How to Fix It |
|---|---|---|
| Second or additional job | Anyone with more than one employer | Usually intentional — no fix needed |
| Second pension income | Retirees receiving multiple pensions | Usually intentional — allowance used elsewhere |
| No P45 from previous employer | New starters without leaving documentation | Give employer P45 or complete starter checklist |
| HMRC does not have your income details | Changing jobs, return to work after a gap | Contact HMRC or submit P45 / starter checklist |
| Applied in error to main job | Any employee — rare but it happens | Contact HMRC immediately — refund should follow |
| Director salary on a second payroll | Limited company directors with dual income | Check with accountant — may be intentional |
When BR is Correct
BR is the right code for a second or additional income source when your Personal Allowance is already being used in full against your main job. If you work two jobs simultaneously, your primary employer holds your full 1257L code, and your secondary employer correctly holds BR. The same applies if you receive a pension alongside employment — the pension provider may hold BR while your employer holds the allowance.
In those situations, trying to change the code would simply shift the allowance from one source to the other, not double it. You only ever receive the allowance once.
When BR is Wrong
BR becomes a problem when it is applied to what is actually your only or main income source. This typically happens when:
- You left your previous job, and HMRC applied BR temporarily while waiting for your new employer’s details
- You are a new starter and your employer did not receive your P45 or process the starter checklist in time
- HMRC has not yet updated your record following a change in circumstances
- There has been a processing error on the HMRC side — rare, but it does happen
If BR is your only tax code — meaning it is on your main and only source of PAYE income — you are almost certainly overpaying tax. Contact HMRC on 0300 200 3300 or check your Personal Tax Account at gov.uk. Do not leave it to resolve itself; HMRC will not always catch this automatically within the tax year.
Is the BR Tax Code for a Second Job?
Yes — BR is one of the most common codes used for second job income, and in that context it is usually correct. When you have two jobs at the same time, HMRC applies your Personal Allowance to whichever job is registered as your main employment. The second employer receives a BR code because the allowance is already being used elsewhere.
This is not a penalty or a problem — it simply reflects how the tax system handles multiple income sources. You can only receive your £12,570 Personal Allowance once per tax year, not once per employer.
What If My Second Job Income Is Small?
Even if your second job income is modest — say £300 or £500 per month — the BR code will tax all of it at 20% with no tax-free portion. If your main job income leaves some of your Personal Allowance unused because your salary is very low, you can potentially ask HMRC to split the allowance between your two employments. This means part of your allowance is applied to your main job and the remainder is applied to your second job.
For example, if your main job pays £8,000 per year, you only use £8,000 of your £12,570 allowance there. The remaining £4,570 could be applied to your second job, meaning roughly £380 per month of that income would be tax-free rather than taxed at 20%.
To request a split allowance, contact HMRC directly. They will issue updated coding notices to both employers. It is worth doing the maths first — if the admin involved is not worth the saving, you can simply reclaim any overpaid tax at the end of the year instead.
Splitting your Personal Allowance between two jobs requires HMRC to issue separate coding notices to two different employers. If your income from either job changes significantly, you may need to ask HMRC to update the split. It is easier to manage than it sounds, and the saving can be meaningful.
Will I Get a Tax Refund on a BR Code?
Potentially yes — and this is one of the most important points to understand about a BR code.
If your BR code was applied to income that should have received your Personal Allowance — because it was your main or only income source — then you have been overpaying tax. HMRC will usually identify this through its end-of-year reconciliation process and issue a P800 tax calculation letter showing a refund is due.
However, the P800 process is not guaranteed to catch every case. HMRC’s reconciliation relies on accurate Real Time Information (RTI) submissions from your employer. If there was a delay in processing or your employment records were incomplete during the year, the overpayment might not be flagged automatically.
How Do You Claim a Refund From a BR Code?
There are three main routes, depending on your situation:
- Wait for a P800: After the tax year ends in April, HMRC sends P800 letters to people it believes have overpaid. If yours shows a refund, you can claim it online or wait for a cheque. HMRC typically sends P800s between June and November.
- Check your Personal Tax Account: Log into gov.uk and view your tax history. If the figures show you paid more than you owed, you can initiate a refund request directly from there without waiting for a P800.
- Contact HMRC during the year: If you believe you are currently overpaying because BR was applied to your main income, contact HMRC at 0300 200 3300. They can issue an updated code immediately, which reduces your tax from the next payroll run, and can also arrange an in-year repayment if a significant overpayment has already built up.
HMRC can only refund overpaid Income Tax going back four tax years. If you had a BR code on your main income several years ago and never claimed, time may be running out. Check your Personal Tax Account to see whether older refunds are showing and claim them before the window closes.
Quick Reference: BR and Other Tax Codes Explained
The table below shows how BR compares to the other codes you are most likely to encounter on a UK payslip:
| Tax Code | Personal Allowance? | Rate Applied | Most Common Use |
|---|---|---|---|
| 1257L | Yes — £12,570 | 20% above threshold | Main employment / single income |
| BR | No | 20% flat rate | Second job / second pension |
| D0 | No | 40% flat rate | Higher-rate second income |
| D1 | No | 45% flat rate | Additional-rate second income |
| 0T | No | 20% / 40% / 45% | No info — most punishing emergency code |
| K | Negative | Adds to taxable pay | Unpaid prior-year tax / benefit-in-kind |
| NT | N/A | No tax at all | Rare — specific HMRC exemptions |
| S prefix | Yes (Scottish) | Scottish rates | Scottish taxpayers |
The codes D0 and D1 work the same way as BR but at higher tax rates. If you have a very well-paid second income source, HMRC may use D0 or D1 rather than BR to reflect the higher rate that income would be taxed at if it were added to your main income.
How Do You Fix a Wrong BR Tax Code?
If you believe BR has been applied incorrectly to your main income source, the fix is straightforward but it does require you to take action — HMRC will not always catch and correct it automatically mid-year.
Step 1 – Check Your Personal Tax Account
Log into your Personal Tax Account at gov.uk using your Government Gateway credentials. Under ‘Check your Income Tax’ you can see your current tax code for each employment or pension, and HMRC’s explanation of why that code is in place. This tells you exactly what HMRC believes about your income sources.
Step 2 – Contact HMRC or Submit Your P45
If the issue is that your new employer does not have your P45, providing it is usually the fastest fix. Your employer updates their payroll records and HMRC issues a corrected code within one to two payroll cycles. If a P45 is not available — for example because you have been out of work for a period — complete the new starter checklist with your employer to confirm your tax situation.
If the error is on HMRC’s side rather than your employer’s, calling HMRC directly on 0300 200 3300 is the most direct route. Have your National Insurance number, your employer’s PAYE reference (shown on your payslip), and your most recent payslip to hand.
Step 3 – Allow One or Two Pay Periods
Once HMRC issues a corrected code, your employer’s payroll software picks it up and applies it from the next pay run. Because PAYE operates cumulatively across the tax year, any overpayment from months on the BR code should automatically be corrected in subsequent months once the right code is in place. You do not necessarily need a separate refund — the adjustment often happens through reduced tax deductions in the following pay periods.
Does the BR Tax Code Apply to Self-Employed People?
If your only income is from self-employment as a sole trader, you will not have a PAYE tax code at all. Your tax is calculated through Self Assessment and paid directly to HMRC — BR and all other PAYE codes only apply to employment income or pension income processed through a payroll.
However, the BR code can become relevant if you are self-employed and also have an employment on the side, or if you are a limited company director paying yourself a salary. In those cases:
- Self-employed with a second PAYE job: Your employment income will have a tax code. If it is your secondary source of income — your main income being self-employment — HMRC may apply BR to the employment since your Personal Allowance is being managed through Self Assessment.
- Limited company director: If you pay yourself a salary through PAYE alongside dividend income, your salary will be coded. For many directors, the salary is set low (often at or just below £12,570) and the BR code may appear if you have a second PAYE income source such as another directorship.
FAQs About BR Tax Code in the UK
Can I have a BR code on my main job?
Yes, but it would normally be wrong. BR on your main and only job means you are paying 20% tax on every pound with no Personal Allowance. This usually happens because HMRC does not yet have the information to issue your full 1257L code. Contact HMRC or submit your P45 to your employer to get it corrected as soon as possible.
Is BR a permanent tax code?
No. BR is generally a temporary or situational code. For a second job it remains in place for as long as you hold that job. For a main income it should be updated once HMRC has the information it needs. If you have been on BR for more than two or three pay periods without explanation, contact HMRC to find out why.
Will my employer know I have a second job if HMRC issues BR?
Your employer receives your tax code — BR — but this alone does not tell them you have a second job. BR is also used in emergency situations, so a new employer seeing BR on your code cannot draw a definitive conclusion from it. That said, some employers ask directly on new starter forms whether you have other employment. Check your contract if confidentiality is a concern.
Does a BR code affect National Insurance?
No. National Insurance is calculated separately from Income Tax and is not affected by your tax code. The BR code changes how Income Tax is calculated but leaves NI contributions unchanged. You pay employee NI at 8% on earnings above £12,570 regardless of whether your Income Tax code is 1257L, BR, or anything else.
Final Thoughts
The BR tax code is not always a sign that something has gone wrong — for a second job or second pension, it is exactly the right code in most cases. The problem is when it appears on income that should be receiving your Personal Allowance but is not, because it means you are paying 20% tax from the first pound rather than from £12,570.
The practical steps are simple: check your Personal Tax Account to understand why the code is in place, submit your P45 or starter checklist if your employer is missing information, and contact HMRC directly if the code appears to be an error on their side. Any overpaid tax can be reclaimed — either through an in-year correction or via a P800 refund after the tax year ends.
If you run a limited company or are self-employed alongside PAYE employment and want to make sure your tax codes and Self Assessment position are both accurate, the team at Micro Entity Accounts can review your overall tax position and make sure nothing is being missed.
Disclaimer: The content on MicroEntityAccounts is for informational purposes only and do not constitute tax or financial advice. We recommend consulting a certified tax professional or the HM Revenue and Customs Dept (HMRC) for accurate guidance. MicroEntityAccounts is not responsible for any decisions made based on the information provided.
