Discover what the BR tax code means in the UK, why it’s used, and how to fix it if applied incorrectly. A helpful guide for employees and new starters.
If you’ve recently started a new job or checked your payslip and noticed the tax code “BR,” you might be wondering what it means and how it affects your income. In this guide, we’ll explain the BR tax code, why it might apply to you, and what you should do if you think it’s incorrect.
The BR tax code stands for “Basic Rate.” If you’re on a BR tax code, it means that all of your income from that job is taxed at the basic rate of 20%, with no personal allowance being applied. This usually happens when:
You’re working a second job or have multiple sources of income.
HMRC hasn’t received enough information to assign the correct tax code.
Your employer hasn’t yet received your P45 from a previous job.
The BR code is commonly used in situations where HMRC needs to make sure tax is being paid while they wait for more information. You might be assigned a BR tax code if:
You’ve just started a new job and didn’t provide a P45.
You’re receiving pension income alongside employment income.
You earn income from multiple employers at the same time.
Being taxed under the BR code doesn’t necessarily mean you’re overpaying permanently, but it’s important to correct it to avoid any long-term issues.
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If you believe you’ve been given the BR tax code in error, here are some steps you can take:
Check Your P45 and Payslips: Ensure your employer has the correct documents.
Contact HMRC: Call HMRC or use your Personal Tax Account online to review your tax details.
Update Your Employer: Provide any missing or updated documentation to your payroll department.
Claim a Refund: If you’ve overpaid tax due to the BR code, HMRC will usually issue a refund after the tax year ends, or sooner if corrected mid-year.
The BR tax code can lead to unnecessary deductions if not corrected promptly. It’s essential to stay on top of your tax codes and keep your employer informed. If you’re unsure how to resolve a BR tax code or need professional assistance, don’t hesitate to seek support.
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