The BR tax code—often called an emergency code—means HMRC temporarily taxes your income at 20% without applying your tax-free personal allowance. This usually happens in three key scenarios: if you have more than one job (where your main job uses your allowance), your new employer lacks sufficient information, or your circumstances change (like a sudden income shift). For example, if you earn £25,000 from your primary role and an additional £10,000 from a second job, the extra income is fully taxable under BR code.
As an accountant, I’ve seen many employees panic when they spot the higher tax deduction on their payslip. But here’s the thing: while the basic rate seems straightforward, misunderstandings lead to overpaying or underpaying PAYE taxes. The UK tax system can be tricky—HMRC assigns different tax codes based on your employment details, and if they assume you’ve used your personal allowance elsewhere, you’ll get this specific code. The fix? Stay informed, check your tax code regularly, and reach out to HMRC.
Understanding the Basics
Meaning of BR Tax Code
The BR tax code stands for Basic Rate. If your payslip has “BR” in the tax code section, it means you’re being taxed at the basic income tax rate (currently 20%) on all your earnings from that job — with no personal allowance applied.
What BR Stands For
BR literally means Basic Rate. It assumes that you’ve already used your tax-free personal allowance (£12,570) elsewhere — maybe in another job or pension.
When is the BR Tax Code Used?
You’ll usually be placed on the BR tax code if:
You have a second job
You receive a pension
Your employer didn’t get the right tax info from HMRC in time
The BR tax code pops up in several situations, and it’s usually when HMRC doesn’t have your complete income picture. If you’ve got more than one job or a pension alongside work, your primary source gets the personal allowance, while the additional income gets taxed at the basic rate (that’s 20%). I’ve seen many clients panic when they’re placed on this code after starting a new job – especially when they haven’t given their previous employer’s P45 to the new employer. Without that previous earnings information, payroll departments often use the BR code temporarily as a safety measure.
Another common scenario? Those taxable benefits like a company car or medical insurance. If your main income has already used up your allowance, these perks get the BR code treatment too. From experience, this catches people off guard – they don’t realize their employer benefits count as income. The system isn’t perfect either; sometimes it’s just that HMRC didn’t get the right tax info in time. I always tell clients – if you spot this code unexpectedly, check if you’ve got a second job or recently changed roles.
You might also like: UK’s Legal Drinking Limit: What You MUST Know!
How Tax Codes Really Work
Your tax code is that mysterious combination of numbers and letters your employer or pension provider uses to deduct the right tax from your salary or pension each pay period. HMRC calculates this based on your income and personal circumstances – like whether you’ve started a new job or have additional income. Most people recognize codes like 1257L (meaning you can earn £12,570 tax-free), but the BR tax code works differently – it taxes your full income at 20% because HMRC assumes you’ve used your tax-free personal allowance elsewhere.
In my accounting practice, I’ve seen countless clients confused when their taxable income suddenly changes after a circumstances change. Maybe they switched jobs or got a second income stream. That’s when HMRC might adjust your code to reflect your updated situation. The key is understanding that your tax-free income allowance is entitled to you each tax year, but the system doesn’t always get it right automatically. If you’re paying income tax under a BR tax code when you shouldn’t be, those full income details need checking – I’ve helped clients reclaim thousands by spotting these errors.
Implications of the BR Tax Code
That BR tax code stamp on your payslips isn’t just bureaucracy – it directly affects your take-home pay. Let me show you the math: if you earn £30,000 annually under this code, you’ll pay £6,000 in taxes (that’s 20% of your income), leaving £24,000 after tax deductions. I’ve seen too many workers ignore these numbers, only to discover discrepancies months later when their savings fall short.
Here’s what most don’t realize – an incorrect BR code can silently lead to overpayment or underpayment, sometimes for years. That’s why it’s essential to monitor every payslip for accuracy. When something looks off (and in my experience, about 1 in 5 tax codes have errors), contacting HMRC becomes crucial. The HM Revenue and Customs team can help rectify these cases, but only if you catch them early. Pro tip: circle those tax code numbers in red every payday – your future self will thank you.
How to Check if You’re on a BR Tax Code
Spotting a BR tax code is simpler than most people think. Just grab your latest payslip and look near your name or National Insurance number – if you see BR printed there, it means all your income from that job is being taxed at the basic rate of 20%, with no personal allowance applied. I’ve helped dozens of clients who missed this small but crucial detail on their payslips, especially those with second jobs or changing jobs.
You’ve got multiple ways to check – your P45 or P60 forms show your tax code history, while the HMRC app lets you view and update your current code instantly. If it’s your only job and you see BR, you’re likely overpaying tax – a mistake I see weekly in my practice. The HMRC Personal Tax Account at GOV.UK gives the full picture, including any Tax Code Notice letters they’ve sent. Pro tip: that https://www.gov.uk/check-income-tax link is gold for quick tax info checks without calling.
What is the Purpose of a BR Tax Code?
The Basic Rate Coding system ensures everyone is at least paying tax at the basic rate when HMRC or employers are unsure about your full tax details. In my accounting practice, I’ve seen how this stop-gap measure helps prevent underpayment that could lead to nasty future liabilities – but here’s what most people don’t realize: it’s meant to be a temporary solution that requires correction to avoid overpayment.
I always explain to clients that while the system protects against owing money later, it often works too well – leaving many taxpayers paying more than they should. That’s why catching and fixing these codes quickly matters. The government would rather have you pay 20% upfront than risk you owing them later, even if it means you need to claim back what’s yours.
Is BR an Emergency Tax Code?
While the BR tax code isn’t technically classified as an emergency tax code, it often gets assigned in situations that closely resemble emergency tax scenarios. The BR code stands for Basic Rate, which indicates your income from that particular job or source gets taxed at the basic rate of 20% with no personal allowance applied. I’ve seen many clients confused when they spot this on their payslips – it typically means HMRC lacks sufficient information about their full earnings.
The BR M1 variation is definitely temporary – it’s used when the tax office needs to ensure you’re not underpaying taxes while they clarify your situation. These Emergency codes, including the W1/M1 Codes for Weekly or monthly income, exist to prevent tax gaps when accounting for your cumulative income. My advice? If you see these codes, contact HMRC immediately to avoid overpaying tax. They’ll review your details and apply the correct code, saving you money and headaches down the line.
HMRC Tax Codes
The HMRC system uses several tax codes to calculate what you owe, with the Basic Rate Code (BR) being just one option. When they lack complete information about your income or allowances, they’ll assign this code as a temporary measure. I always remind clients that the standard code 1257L is what most want to see – it gives the full personal allowance without any surprises. The tricky ones are M1/W1 emergency codes which don’t account for previous earnings, often catching people off guard.
Here’s something many don’t realize – if you’ve been overtaxed under the tax code BR, you’re likely eligible for a BR tax code refund. The good news? HMRC automatically reviews your tax situation each year. I’ve had clients receive unexpected welcome surprises when they get refunds for too much tax paid. That’s why regularly checking your HMRC online account is so crucial – it helps ensure you’re being taxed correctly from the start.
Is BR Tax Code Always a Problem?
When It’s Correct
If you’re already using your personal allowance elsewhere, BR is fine. It ensures you’re taxed properly across multiple income sources.
When It’s a Mistake
If BR is applied to your only job, then you’re overpaying tax and need to fix it fast.
Fixing an Incorrect BR Tax Code
Contacting HMRC
The quickest way is to call HMRC (0300 200 3300) or use the online tools.
Updating Employer Information
Make sure your employer has your P45 from your last job or that you completed a starter checklist.
Using the HMRC Online Portal
Log into your Personal Tax Account to update or check your tax code. It’s simple and saves time.
Refunds and BR Tax Code
Can You Get a Refund?
Yes, if you were incorrectly taxed under BR, you’re likely owed money.
How to Claim Overpaid Tax
HMRC will usually correct it automatically. If not, you can:
Request a P800 form
File a self-assessment
Use the HMRC refund portal
P800 Form Explained
The P800 form shows how much you overpaid and how to get it back — often via a direct bank refund or cheque.
How to Avoid Being Put on BR Code
New Job Setup Mistakes
The most common reason people get put on BR is failing to submit a P45 or starter form when changing jobs.
P45 and P46 Forms
Always hand your P45 to your new employer or complete a P46 (now known as the starter checklist) to provide tax details.
Importance of Accurate Information
Give your correct National Insurance number, address, and other tax details to avoid confusion.
Tips to Stay on the Right Tax Code
Annual Income Check
Make sure your total earnings match HMRC records.
Reviewing Your Payslip Regularly
Keep an eye on those deductions and codes every payday.
Talking to Your Payroll Team
If something looks off, speak up immediately to your HR or payroll team.
Conclusion
The BR tax code isn’t necessarily bad, but when applied incorrectly, it can cost you real money. The good news? It’s completely fixable if you stay informed and proactive. I’ve seen too many people assume their taxes will sort out themselves, only to find they’ve been overpaying or underpaying income tax all year. That’s why Understanding how tax codes work is vital – it helps manage your tax bill effectively and prevents nasty surprises at the end of the tax year.
In my work with clients, I always stress that the key is to regularly check your payslip and quick react when something doesn’t look right. If you think your code might be incorrect, don’t wait – contact HMRC to request a tax code review. Many don’t realize they could be eligible for a tax rebate if they’ve overpaid. The system means all income gets taxed at 20% without your personal allowance, so catching errors early is important to ensure you’re paying the right amount.
FAQs
1. Can I claim back tax if I was wrongly put on the BR code?
Yes, if you overpaid, HMRC will usually issue a refund automatically or after you contact them.
2. Why did my new job put me on the BR tax code?
Probably because they didn’t get your P45 or enough information about your tax situation.
3. Does BR tax code mean I’m paying more tax?
Yes — it removes your personal allowance, so you’re taxed on every pound you earn.
4. How do I get off the BR tax code?
Submit the right documents to your employer and contact HMRC if needed.
5. Is the BR tax code ever the correct one to be on?
Yes, if you have a second job or receive other taxable income using up your allowance.