TL;DR: BR is a UK tax code meaning "Basic Rate". An employee or pensioner with code BR has every pound of taxable income from that source taxed at the basic rate (20 percent in the 2026-27 tax year for England, Northern Ireland and Wales, with Scottish rates differing slightly for Scottish taxpayers), with no Personal Allowance applied. BR is the standard code for a second job or pension where the Personal Allowance is already being used in full against another income source. It is also sometimes used as a temporary emergency code when the employer does not have full tax details. BR may produce an over- or underpayment of tax at the end of the year, depending on the taxpayer's total income; HMRC reconciles the position through the P800 calculation.
Last reviewed May 2026
The UK PAYE tax code system uses letter-only codes for specific situations where the standard allowance-based calculation does not apply. BR is one of these special codes: it tells the employer or pension provider to deduct tax at the basic rate on every pound of taxable income from that source, with no Personal Allowance.
This guide explains exactly what BR means, when HMRC issues it, the difference between BR and the related D0 and D1 codes, the typical scenarios where BR is correct (second job, second pension), the scenarios where it can result in an over- or underpayment, and the steps to take if BR has been applied in error.
What BR means in the PAYE system
BR stands for "basic rate". An employer using code BR deducts income tax at the basic rate (20 percent in 2026-27 for taxpayers in England, Northern Ireland and Wales) on every pound of taxable pay from that source. No Personal Allowance is applied to that income; the assumption is that the Personal Allowance is being used elsewhere.
BR differs from the standard 1257L code in two ways. First, it applies no allowance, so all the income is taxed. Second, it applies only the basic rate (20 percent), regardless of whether the total income across all sources puts the taxpayer into the higher-rate band. The latter point is the most common source of underpayments in second-job or second-pension situations.
For Scottish taxpayers, the SBR code applies the Scottish basic rate (20 percent in 2026-27) instead. Welsh taxpayers' codes are prefixed with C (CBR). The Personal Allowance is the same UK-wide but the basic-rate amount applied under BR follows the relevant national rate.
The typical scenarios where BR is correct
The most common scenario where BR is correct is a second job or second pension. An employee with a main job earning 30,000 pounds will have the Personal Allowance (12,570 pounds) applied to that job through code 1257L. If the same employee takes a second job paying 5,000 pounds a year, HMRC will issue code BR for the second job so that the second income is taxed in full at the basic rate, because the Personal Allowance has already been fully used against the main job.
The same principle applies to a retiree drawing income from two pensions. The Personal Allowance is allocated to one pension (typically the larger one), with the other pension's PAYE running on BR. Pensioners with three or more pensions may have BR on multiple secondary pensions.
The result is that, across both income sources, the right amount of tax is collected if the total income is within the basic-rate band. The first 12,570 pounds is tax-free (through the main source's allowance), the next 37,700 pounds is taxed at 20 percent (through the main source plus the BR secondary source). The math is correct for a basic-rate taxpayer.
When BR can produce an underpayment
BR can produce a significant underpayment of tax for a higher-rate taxpayer with a second job or pension. If the main job pays 50,000 pounds and the second job pays 10,000 pounds, the total income is 60,000 pounds, putting the taxpayer in the higher-rate band on the second job's income. But BR only deducts 20 percent, not 40 percent. The underpayment is the higher-rate band tax on the second job's income: 10,000 pounds at the difference of 20 percentage points equals 2,000 pounds.
HMRC normally collects the underpayment in one of two ways. The first is by adjusting the next year's tax code to a lower number, recovering the underpayment through PAYE over 12 months. The second is by issuing a P800 calculation after the year-end with a demand for the underpaid tax, payable directly or through next year's code. Either way, the taxpayer owes the additional tax.
For higher-rate or additional-rate taxpayers with secondary income, HMRC may issue code D0 (all income at the higher rate of 40 percent) or D1 (all income at the additional rate of 45 percent) instead of BR for the secondary source. This ensures the correct tax is deducted at source.
When BR can produce an overpayment
BR can produce an overpayment if the secondary source's earnings, combined with the main source's earnings, do not use the full Personal Allowance. For example, a taxpayer with a main job paying 8,000 pounds and a second job paying 4,000 pounds has a total income of 12,000 pounds, which is below the 12,570 pound allowance.
If the main job is on 1257L and the second job is on BR, the main job's PAYE would calculate no income tax (because the income is below the allowance), but the second job's PAYE would deduct 20 percent (800 pounds) on the 4,000 pounds. The taxpayer has overpaid 800 pounds. HMRC reconciles this through the P800 calculation after the year-end and refunds the overpayment.
For low-income taxpayers, HMRC can sometimes issue an alternative code that splits the Personal Allowance across both income sources (avoiding the BR pitfall). The taxpayer can also request a code split through the Personal Tax Account. This avoids the overpayment in the year and removes the need for a year-end refund.
BR versus D0, D1 and 0T
D0 is the equivalent of BR for higher-rate income: all the source's income is taxed at the higher rate (40 percent). D0 is typically used for a high-earning taxpayer's second job or pension. D1 is the additional-rate version, taxing all the source's income at 45 percent, used where the taxpayer's total income exceeds the additional-rate threshold.
0T means "no allowance", and is used where HMRC has no information about the taxpayer's other income sources. 0T applies the income tax bands as if it were the only source (so the first 37,700 pounds at 20 percent, then 40 percent, then 45 percent) but with no Personal Allowance. 0T is sometimes used as an emergency code on starting a new job before HMRC has the full picture.
The other emergency codes include 1257L W1/M1 (the standard allowance applied on a non-cumulative basis, used after a starter checklist where the new employer has no P45 from the previous job). Each emergency code has a specific use case; HMRC updates the code to a permanent one once the year-to-date data is reconciled.
Scotland and Wales: SBR and CBR codes
Scottish taxpayers' BR-equivalent code is SBR, applying the Scottish basic rate (20 percent in 2026-27) under the Scottish income tax bands set by the Scottish Parliament. Scottish higher-rate equivalents are SD0, SD1, SD2, SD3 covering the intermediate, higher, advanced and top rates respectively.
Welsh taxpayers' BR-equivalent code is CBR, applying the basic rate set by the Senedd Cymru (currently the same as the rest of the UK at 20 percent). Welsh equivalents of the higher codes are CD0 and CD1 mirroring the rest-of-UK structure.
The prefix S or C tells the employer's payroll system which national tax bands to apply. The Personal Allowance is the same UK-wide, but the relevant rates differ. Scottish taxpayers can therefore have an SBR code while continuing to use a 1257L (no prefix) is incorrect; the S prefix should appear on all of their PAYE codes for the year.
What to do if BR has been applied in error
If BR has been applied to the main job (and the standard 1257L should apply instead), the result is a substantial overpayment of tax during the year (because the Personal Allowance is not being applied). The taxpayer should check the Personal Tax Account on the GOV.UK website, identify why HMRC has applied BR (it may be because HMRC believes the source is a secondary source), and update the information.
Common reasons for BR being applied to a main job include: a missing or incorrectly completed starter checklist when starting the job; HMRC not having received the P45 from the previous job; or HMRC believing another source is the main source. The fix is usually a phone call or webchat with HMRC to confirm the correct allocation. A new code is issued and applied at the next pay period; the year-to-date over-payment is refunded through the payroll.
If the over- or underpayment is not corrected during the year, the P800 calculation at year-end picks it up and either refunds the overpayment (typically by bank transfer or cheque) or sets up the underpayment to be collected through the next year's code.
How we verified this
This article reflects HMRC's published guidance on PAYE tax codes including the special codes BR, D0, D1, 0T and NT, the Income Tax Act 2007 for the Personal Allowance and tax bands, the Scottish Parliament's annually set Scottish income tax bands, and the Senedd Cymru's role in setting the Welsh income tax rates under the Wales Act 2014. The specific reason for any individual's BR code is visible in the Personal Tax Account; this article describes the general logic.
Disclaimer: This article is general information about the UK PAYE tax code BR and is not personal tax advice. Individual tax codes reflect specific HMRC adjustments. Anyone with concerns about a particular code should check the Personal Tax Account on the GOV.UK site and contact HMRC for a definitive answer.
Frequently asked questions
What does BR mean on a UK tax code?
BR stands for "basic rate". An employer or pension provider using code BR deducts income tax at the basic rate (20 percent in 2026-27 for taxpayers in England, Northern Ireland and Wales) on every pound of taxable income from that source, with no Personal Allowance applied. BR is normally the correct code for a second job or pension where the Personal Allowance is already used on a main income source.
Why has my tax code been changed to BR?
BR is typically applied when HMRC determines a particular source is a secondary income source. This usually happens automatically when a taxpayer starts a second job or starts drawing a second pension. BR can also be applied as a temporary emergency code when HMRC does not have full information; in that case it is usually replaced with a permanent code within a few weeks.
Will I overpay tax on a BR code?
Sometimes. If the BR source's income combined with the main source's income would have left part of the Personal Allowance unused, the taxpayer overpays during the year and HMRC refunds the difference through the P800 calculation after year-end. If the combined income is within the basic-rate band, BR collects the right amount. If the combined income is in the higher-rate band, BR under-collects and HMRC pursues the underpayment.
What is the difference between BR, D0 and D1?
BR taxes the source's income at the basic rate (20 percent). D0 taxes it at the higher rate (40 percent) and is used for a secondary source where the taxpayer is a higher-rate taxpayer overall. D1 taxes at the additional rate (45 percent) for the highest-rate taxpayers. Each is a special "all at one rate, no allowance" code for a secondary income source; HMRC picks the right one based on the taxpayer's total expected income.
Can I get my BR tax code changed?
Yes, if it is wrong. The Personal Tax Account on GOV.UK lets the taxpayer view why BR has been applied and update the information if HMRC has it wrong (for example, if the source HMRC has marked as secondary is actually the main income source). For more complex cases, contacting HMRC by phone or webchat is the right route. A new code is issued and applied at the next pay period.
