TL;DR: The BR tax code stands for "Basic Rate" and tells the employer or pension provider to deduct income tax at the basic rate (20 percent in the rest of the UK, 20 percent on the Scottish basic rate) on every pound of pay from that source, with no personal allowance applied. BR is the right code where the taxpayer has another source of income that is already using the personal allowance, most commonly a main job or a state pension. BR is the wrong code where it has been applied by default because the personal allowance has not yet been allocated. The fix is normally to check the personal tax account on GOV.UK, contact HMRC, or hand over a P45 from a previous employer. End-of-year reconciliation through a P800 picks up any over- or underpayment.
Last reviewed May 2026
UK PAYE tax codes are made up of numbers and letters. The number, multiplied by 10, is the annual tax-free amount; the letter is a category code that tells the employer or pension provider how to apply the code. BR is one of the alphabetical-only codes (alongside D0, D1, NT and OT) that does not have a number, because it does not carry a tax-free amount at all.
This guide explains exactly what the BR code means, when it is the right code and when it is the wrong code, how the tax is calculated under it, how to correct it part-way through the year, and how the position is reconciled at the end of the tax year.
What BR means in plain terms
BR is shorthand for "basic rate". Under a BR code, every pound of pay from that source is taxed at the basic rate of income tax (20 percent in the rest of the UK, 20 percent on the Scottish basic rate where the taxpayer's main residence is in Scotland). There is no tax-free portion in the pay packet and no higher- or additional-rate deduction inside the BR code itself.
BR is used where HMRC has allocated the personal allowance against another income source. The most common reason is a second job: the personal allowance is normally used against the higher-paying job (typically 1257L), and the second job carries the BR code so that the personal allowance is not double-counted. BR is also used where a state pension or a private pension is the main source of income and a second income (such as a part-time job or a smaller private pension) carries BR.
BR does not by itself mean too much tax is being deducted. It means no personal allowance is applied at that source. If the personal allowance is already in use elsewhere, BR is structurally correct. If the personal allowance is not in use elsewhere, BR will produce too much tax until the code is corrected.
When BR is the right code
BR is the right code where the taxpayer has another source of taxable income that is already using the personal allowance in full. The classic case is two jobs: a full-time main job that uses the entire personal allowance, and a part-time second job whose income would all otherwise be taxed at the basic rate anyway. Allocating BR to the second job and 1257L to the first produces the same total tax as a cumulative calculation across both sources.
A retired person with a private pension and a state pension is another common BR case. The state pension is paid gross (without tax deducted at source), and HMRC adjusts the private pension code to recover the tax due on the state pension. If the state pension fully uses the personal allowance, the private pension code becomes BR so that 20 percent is deducted on every pound. Where the private pension would push the taxpayer into the higher rate, HMRC issues a D0 code (40 percent on every pound) on the second source instead.
BR is also the standard code for casual or temporary income where the personal allowance is being used elsewhere, including some second-employment scenarios where the taxpayer is not at the higher rate threshold.
When BR is the wrong code
BR is the wrong code where the taxpayer's personal allowance is not actually in use elsewhere. The most common scenario is a new starter who joined without handing in a P45 and answered the new starter checklist in a way that suggested another job was active, when in fact the prior job has ended. HMRC may apply BR as a precaution until the right information arrives.
Another wrong-code scenario is where a previous job has ended and the personal allowance should have moved to the new job, but the employer's payroll has not picked up the new code yet. The personal allowance can take a few weeks to be reallocated after a job change; during that gap, BR (or OT) can sit on the new job.
A third pattern is where a private pension and a smaller job overlap: HMRC may issue BR on whichever source it considers the "second" income, but the taxpayer may prefer a different split. Asking HMRC to reallocate the personal allowance to the source that produces the lowest total deduction at source (usually the source closest in size to the personal allowance) can smooth the cash flow even though the total annual tax is the same.
How the BR calculation works in payroll
Under a BR code, the employer deducts 20 percent of every pound of taxable pay in each pay period. There is no annualisation, no use of the cumulative tax-year position, and no allowance for the personal allowance. The calculation is straightforward and produces a level deduction across the year provided the pay is level.
National insurance is calculated separately from income tax and is not affected by the tax code. NICs are calculated each pay period against the NICs thresholds in force for that period, regardless of whether the income tax code is BR or 1257L. Many BR-coded employees see a payslip where the income tax deduction is exactly 20 percent of taxable pay, while the NIC line is computed independently.
Salary sacrifice arrangements (pension contributions, cycle-to-work, employer-provided benefits) reduce taxable pay before the BR deduction is applied, so the cash benefit of salary sacrifice is the same regardless of whether the code is BR or 1257L. The tax saving on a 100-pound salary sacrifice into a workplace pension is 20 pounds under both codes for a basic-rate taxpayer; the difference shows up against the personal allowance side of the calculation, not the BR side.
Correcting a BR code part-way through the year
The fastest correction is through the personal tax account on GOV.UK. The account shows all PAYE income sources HMRC is aware of, the current code on each, and how the personal allowance has been allocated. The "tell HMRC about a change" option lets the taxpayer report that a previous job has ended, that a different income source should hold the personal allowance, or that the position has changed in some other way. Updates flow to the employer through the next PAYE notification.
Calling HMRC can be faster for a clear-cut case (a job ended, a P45 from the prior employer was lost, a code change is needed urgently before payroll runs). HMRC issues a new code to the employer and provides a reference number. The employer applies the new code from the next available pay date.
Where the new cumulative code triggers a refund of overpaid tax from the year-to-date position, the refund appears in the next pay packet as a negative tax line, or in some payroll systems as a separate payment. The refund is the cumulative tax overpayment from the start of the tax year, not just the next pay period.
End-of-year reconciliation and P800 notices
If BR remains in place through the tax year and produces too much (or too little) tax, HMRC reconciles the position after 5 April using the real-time information (RTI) returns from each employer. The reconciliation calculates the correct annual tax across all sources, applies the personal allowance properly, and produces a P800 calculation showing any refund due or extra tax owed.
P800 notices are usually issued between June and October following the end of the tax year. Refunds can normally be claimed by bank transfer through the personal tax account, or are sent by cheque if the claim is not made online within a set period. Underpayments under the simple assessment threshold are coded into a future year's tax code and recovered over the subsequent 12 months.
The reconciliation is the safety net, but it does not avoid the cash-flow cost of having too much tax taken out across the year. Correcting the code as soon as the wrong code is identified gets the right tax position in real time rather than waiting six to nine months for a P800.
How we verified this
The structure of UK tax codes, the operation of the BR code, and the use of cumulative versus non-cumulative codes reflect the HMRC PAYE manual and the GOV.UK guidance on tax codes for employees and pensioners. The new starter checklist and P45 processes reflect current HMRC PAYE rules. The end-of-year reconciliation through P800 and simple assessment is set out in current GOV.UK guidance. Scottish tax rates reflect the powers under the Scotland Act 2016 and the rates set by the Scottish Parliament. Specific figures and procedures should be reconfirmed on GOV.UK for the relevant tax year.
Disclaimer: This article is general information about UK PAYE tax codes. It is not personal tax advice. The right code in an individual case depends on the specific income sources, allowances and reliefs that apply. Anyone unsure about their code should check their personal tax account on GOV.UK or contact HMRC directly.
Frequently asked questions
What does the BR tax code mean?
The BR tax code means "basic rate". Every pound of pay from that source is taxed at 20 percent, with no personal allowance applied at that source. BR is used where HMRC has allocated the personal allowance against another income source, most commonly a main job or a state pension. It produces the right total tax across all sources if the personal allowance is in use elsewhere.
Why am I on a BR tax code?
BR is normally issued where HMRC has allocated the personal allowance against another source (a main job, a state pension, or another private pension). A new starter who joined without a P45 and indicated another job was active also commonly receives BR. A pension provider may issue BR on a second pension where the state pension or another private pension is using the personal allowance.
How much tax do I pay on a BR code?
20 percent of every pound of taxable pay from that source, in every pay period. The amount is calculated against gross pay after any salary sacrifice deductions (such as pension contributions). National insurance is computed separately and is not affected by the tax code.
Will I get a refund if I am on BR?
If BR is the right code (because the personal allowance is in use elsewhere), there is no overpayment and no refund is due. If BR is the wrong code (the personal allowance should have applied at that source), the correction either picks up the year-to-date refund through a new cumulative code or produces a P800 refund after the end of the tax year. Refunds are paid by bank transfer through the personal tax account or by cheque.
How do I get off a BR tax code?
Check the personal tax account on GOV.UK to see how the personal allowance has been allocated across income sources. If the personal allowance should apply at the BR source, use the "tell HMRC about a change" option to update the position, or call HMRC. Handing in a P45 from a previous employer also triggers a code change once HMRC's records catch up.
