TL;DR: The 0T (zero-T) tax code gives no personal allowance and taxes every pound of pay at the relevant income tax rate band, starting at the basic rate. HMRC issues 0T when the personal allowance has already been used elsewhere (typically by another job or pension), when a new starter has not provided P45 or new starter information to the employer, or when a high earner's personal allowance has been tapered to zero because their adjusted net income exceeds 125,140 pounds. Unlike BR (basic rate only) or D0 (higher rate only), 0T applies the proper rate bands progressively. Any overpayment caused by 0T is refunded by HMRC, often automatically when the position is reconciled.
Last reviewed May 2026
The 0T tax code is one of several "non-standard" PAYE codes that turn up when the standard 1257L code does not fit. Where 1257L tells the employer to give the standard personal allowance and tax the rest at the appropriate rates, 0T tells the employer to give no personal allowance at all and start taxing pay from the first pound, applying the rate bands in the normal order: basic, higher and additional.
0T can be applied to a primary income source, a second job, a pension, or any combination. It is not an "emergency" code in the literal sense (the emergency code is normally 1257L W1/M1) but it is often used in similar new-starter situations to make sure HMRC collects approximately the right amount of tax until the proper position is established.
This guide explains what 0T means, the three main reasons HMRC or an employer applies it, how the resulting tax compares with other codes, and the steps to fix the position if 0T has been applied incorrectly.
What 0T does and how it differs from BR and D0
0T is a cumulative or non-cumulative code (depending on how HMRC issues it) that gives no tax-free personal allowance. The "0" indicates the allowance and the "T" indicates that the calculation involves other items HMRC needs to keep under review. Pay is taxed at the basic rate (20 percent) up to the basic rate limit, the higher rate (40 percent) above that, and the additional rate (45 percent) above the additional rate threshold.
BR codes apply the basic rate (20 percent) to all pay from that source, regardless of how much it is. D0 applies the higher rate (40 percent) to all pay. D1 applies the additional rate (45 percent) to all pay. NT applies no tax. None of those codes use the rate bands progressively.
The practical difference is that 0T can produce a more accurate result than BR or D0 for a high earner, because it respects the rate bands. For someone with a salary of, say, 60,000 pounds on a 0T code at one source, the code will tax the first portion at 20 percent and the remainder at 40 percent, broadly matching their marginal position once their personal allowance is used elsewhere.
Reason 1: the personal allowance is used elsewhere
The most common reason for a 0T code is that the personal allowance is being used by another source of income. A typical example is someone who has two PAYE sources, where the first job uses the standard 1257L code and the second job uses 0T. The employee's full personal allowance is being given on the main income, and the second income is therefore taxed without an allowance.
0T applied to a secondary source allows the rate bands to be respected, which is important for someone whose main job already takes them into the higher-rate band. A BR code on a second job in those circumstances would tax the second job at only 20 percent, even if the employee is actually a higher-rate taxpayer overall, leading to underpayment. 0T avoids that.
HMRC decides which code to issue based on the data it holds about each source. The personal tax account on GOV.UK shows the current allocation and lets the employee request a different split between sources where appropriate.
Reason 2: new starter without P45 or new starter information
An employer must apply a tax code from day one of a new employee's first pay. If the new employee has not provided a P45 from a previous employer and has not completed the new starter checklist (formerly the P46), the employer applies a default emergency code. Where the new starter declares this is a second job, or fails to declare anything at all, the default position has historically been the 0T code on a non-cumulative basis.
Once HMRC has matched the new employee's record and decided on the appropriate code, it sends a code change to the employer. The proper code is then applied prospectively, and any overpayment from the early weeks on 0T is reconciled either through subsequent pay periods (if the new code is cumulative) or after the year-end.
The new starter checklist asks three questions to determine which default code applies. Completing it correctly at the start of the job is the easiest way to avoid being put on 0T unnecessarily.
Reason 3: personal allowance tapered to zero by high income
The personal allowance is reduced by 1 pound for every 2 pounds by which adjusted net income exceeds 100,000 pounds. By 125,140 pounds, the allowance has been reduced to zero. For an employee whose income is comfortably above 125,140 pounds, HMRC may issue a 0T code to reflect that there is no personal allowance to give.
This is a deliberate use of 0T rather than the result of a missing form or an unallocated source. It applies the rate bands in the right order, so the basic-rate band is used first, then higher rate above that, then additional rate above 125,140 pounds.
The personal allowance taper is a feature of the income tax system that catches many people unawares the first time their income crosses the threshold. The combined effect with the loss of allowance produces an effective marginal rate of 60 percent in the income band between 100,000 pounds and 125,140 pounds, often referred to as the "60 percent tax trap".
What to do if 0T has been applied wrongly
The most common wrongful application of 0T is to a single PAYE source where the employee has not yet given their employer their P45 or new starter information. Once the missing information is provided, HMRC normally issues a corrected cumulative code, and the over-deducted tax is refunded through subsequent pay (if cumulative) or after the year-end (if not).
The fastest way to fix the position in-year is to log into the personal tax account on GOV.UK and confirm or change the income sources. Where HMRC needs to reallocate the personal allowance between two PAYE sources, the change can be requested online or by phone. Employers cannot change tax codes on their own initiative; they must apply the code HMRC sends them.
A 0T code that was applied because the personal allowance is genuinely used elsewhere or has been tapered to zero is correct. The fix in those cases is not to change the code but to make sure the right total income is reported and the right total tax paid. Self assessment may be required for anyone with adjusted net income above 100,000 pounds.
0T at the year-end and reconciliation
HMRC reconciles each PAYE taxpayer's position after the end of the tax year. Where too much tax has been paid (because, say, 0T was applied for several months and the employee was actually entitled to a personal allowance), HMRC issues a P800 calculation showing the refund due, and pays it directly. Where too little tax has been paid, HMRC similarly issues a P800 with the underpayment, and recovers it through a future tax code change or asks for direct payment.
For taxpayers in self assessment, the position is dealt with through the tax return rather than through P800s. Any overpayment is reflected in the calculation and is refunded after the return is processed; any underpayment is paid alongside the return.
Year-end reconciliation is automatic for most PAYE-only taxpayers, but does not happen instantly. Refunds are typically processed in the summer or autumn following the end of the tax year, so requesting a code correction in-year is generally the faster route to recover money.
Disclaimer: This article is general information about the 0T tax code and how UK PAYE codes are constructed. It is not personal tax advice. The right tax code in any individual case depends on the income sources, allowances and reliefs that apply. Anyone unsure about their code should check the personal tax account on GOV.UK or contact HMRC.
Frequently asked questions
What does the 0T tax code mean?
0T means no personal allowance is given against this source of income, and tax is calculated using the standard rate bands (basic, higher and additional) on every pound of pay. It is used when the personal allowance is already being used elsewhere, when a new starter has not provided sufficient information, or when a high earner's allowance has been tapered to zero.
How is 0T different from BR?
BR taxes every pound of pay from the source at the basic rate (20 percent) regardless of total income. 0T taxes pay using the proper rate bands progressively, so a high earner on 0T at a second job will see some pay taxed at the higher or additional rate. 0T is generally more accurate for a higher-rate taxpayer than BR.
Why am I on 0T at my new job?
The most common reason is that the employer did not have a P45 from a previous employer or a completed new starter checklist when the first pay was processed. Providing the P45 or completing the new starter form should prompt HMRC to issue a proper code. Until then, 0T is used to make sure roughly the right amount of tax is collected.
Will I get a refund if I was on 0T by mistake?
Yes. If the proper cumulative code is issued before the end of the tax year, the over-deducted tax is normally repaid through subsequent pay packets. If the position is not corrected in-year, HMRC reconciles after 5 April and issues a P800 calculation with the refund. Self assessment taxpayers see the refund through their tax return calculation.
Why is my code 0T even though I only have one job?
The most likely reasons are that HMRC believes (correctly or otherwise) the personal allowance has been used elsewhere, that adjusted net income exceeds 125,140 pounds and the allowance has been tapered to zero, or that the new starter information has not yet been processed. The personal tax account shows which assumption HMRC has made and lets the employee correct it if it is wrong.
How we verified this
The construction of UK tax codes, the role of 0T, BR, D0, D1 and NT, and the rules for new starter coding reflect HMRC's published Pay As You Earn manual and the GOV.UK guidance on tax codes. The personal allowance taper above 100,000 pounds reflects section 35 of the Income Tax Act 2007. The use of P800 reconciliation and the personal tax account reflect current HMRC processes. Figures should be reconfirmed on GOV.UK as bands and thresholds change at fiscal events.
