If your payslip suddenly shows the letters “BR” where your normal tax code used to be, it is understandable to be concerned particularly when you notice more tax than expected being deducted. The BR tax code is one of the most commonly applied emergency or special codes in the UK PAYE system, and understanding it is essential for any employee with multiple jobs, a new employer, or income from multiple sources. This definitive AccFirm guide explains what BR means, when it is used, how it affects your pay, and exactly what you should do about it.
What Does BR Mean on a Tax Code?
“BR” stands for “Basic Rate.” When your payslip shows BR as your tax code, it means HMRC has instructed your employer to deduct Income Tax at the basic rate currently 20% on every pound of income from that job, starting from the very first pound.
Unlike the standard 1257L code, the BR code gives you no Personal Allowance whatsoever. Your entire income from that job or income source is taxable at 20%. This makes the BR code significantly more expensive in terms of tax than the standard code but it is not always wrong. In fact, for many employees, the BR code is the correct code for their circumstances.
When Is the BR Tax Code Used?
HMRC applies the BR code in specific, well-defined situations:
1. Second and Additional Jobs
This is the most common reason for a BR code. Every UK taxpayer receives a single Personal Allowance £12,570 in 2025/26. If this allowance is already being used by your main employment, there is no allowance left to apply to a second job. HMRC therefore assigns the BR code to the second job, ensuring that 20% tax is deducted from the first pound of income from that job.
2. Starting a New Job Without a P45
If you start a new job and cannot provide a P45 from your previous employer, your new employer may be instructed to use BR as a temporary emergency code. This often happens if you:
- Left your previous job some time ago and have lost or never received your P45
- Were previously self-employed and have no P45
- Have come from abroad and have no UK employment history
- Completed a starter checklist incorrectly (indicating this is a second job when it is your only job)
3. Pension Income
BR may be applied to pension income if your Personal Allowance is fully used by other income sources, such as your State Pension or another private pension. This commonly occurs when someone has multiple pension pots being drawn simultaneously.
4. HMRC’s Instruction on Complex Cases
In some cases, HMRC may deliberately assign BR to simplify tax collection where the individual has untaxed income from other sources that cancels out or has already absorbed their Personal Allowance.
How Much Tax Do You Pay on a BR Code?
With the BR code, Income Tax is deducted at a flat 20% on all income from that source, from the first pound. There is no tax-free amount.
| Monthly Earnings from Second Job | Income Tax at BR (20%) | Monthly Take-Home (before NI) |
| £500 | £100 | £400 |
| £1,000 | £200 | £800 |
| £1,500 | £300 | £1,200 |
| £2,000 | £400 | £1,600 |
| £3,000 | £600 | £2,400 |
Note: National Insurance is also deducted separately and is calculated on each employment independently you will pay NI on your second job income if it exceeds the Primary Threshold (£242 per week / £1,048 per month in 2025/26).
Is the BR Code Always Correct?
No and this is where many employees are caught out. The BR code is only correct when your Personal Allowance is genuinely fully used by another income source. It is incorrect when:
- This is your only job but you have been placed on BR due to a starter checklist error
- Your Personal Allowance is not fully used for example, you work part-time in your main job and earn below £12,570
- Your previous employer failed to issue a P45 and you started a new job that should be your primary income source
- You started a job during the tax year and have unused Personal Allowance from months of not working
When BR is applied incorrectly to what should be your main and only income, you will pay 20% tax on every pound earned even earnings that should fall within the Personal Allowance. For someone earning £25,000, this means paying approximately £5,000 per year in Income Tax rather than the correct £2,486. This is a significant overpayment that can quickly accumulate.
What Is the Difference Between BR and BR M1 / BR W1?
You may see the code BR on its own, or with a suffix BR M1 (for monthly paid employees) or BR W1 (for weekly paid employees). The suffix indicates an emergency, non-cumulative basis:
- BR (cumulative): Tax is calculated cumulatively across the year. If you had a period of low income, the cumulative calculation can reduce the monthly tax deduction.
- BR M1 / BR W1: Tax is calculated on each pay period independently. No cumulative adjustment applies every month or week starts fresh.
Both result in 20% tax on all income from the job, but BR without a suffix may gradually self-correct if your circumstances change during the year, while BR M1 or W1 will not.
What Should You Do If You Have a BR Tax Code?
Step 1: Determine Whether BR Is Correct
Ask yourself: is this income source my only job or income? If yes, BR is almost certainly wrong. If this is genuinely a second job where your main job fully uses your Personal Allowance, BR is correct and no action may be needed.
Step 2: Provide Your P45 or Complete a Starter Checklist
If BR has been applied to a job that should be your primary income, provide your P45 to your new employer immediately. If you do not have a P45, complete a new starter checklist and ensure you tick the correct statement Statement A (first job this tax year) or Statement B (only job this year, but had a previous job earlier in the year).
Step 3: Contact HMRC
If the code is still incorrect after providing a P45 or starter checklist, contact HMRC directly:
- Phone: 0300 200 3300 (Income Tax helpline)
- Online: Log in to your HMRC Personal Tax Account and update your employment information
- HMRC will issue an updated tax code to your employer once they have the correct information
Step 4: Claim Any Overpaid Tax
If you have been on an incorrect BR code for several weeks or months, you may have overpaid significant amounts of Income Tax. Once your code is corrected, your employer should recalculate your tax position cumulatively and refund any overpayment through your next payslip. If the tax year has ended, HMRC will reconcile via a P800 notice.
BR Tax Code and Self Assessment
If you have a BR tax code on a second job or pension and your combined income from all sources exceeds £100,000 per year, you must register for Self Assessment. Self Assessment allows HMRC to reconcile your total income from all sources and ensure the correct overall tax is calculated. Even below the £100,000 threshold, registering for Self Assessment is advisable if you have complex multi-source income qq112it ensures you do not pay more or less than the correct amount.
Frequently Asked Questions: BR Tax Code
Does BR mean I am paying too much tax?
Not necessarily. BR is correct on a second job where your Personal Allowance is fully used by your main income. It is only “too much tax” if BR has been incorrectly applied to your only income source in which case you are overpaying and should contact HMRC.
Will HMRC automatically fix a wrong BR code?
HMRC should update your code automatically when it receives Real Time Information (RTI) from your employer and processes the correct information. However, this can take weeks. Contacting HMRC directly or providing your P45 speeds up the process considerably.
What is the difference between BR and 0T tax codes?
Both apply no Personal Allowance. BR taxes all income at the 20% basic rate. The 0T code applies progressive rates (20%, 40%, 45%) from the first pound more complex and often used in situations where HMRC expects your overall income to span multiple tax bands.