BR Tax Code: What It Means and When It Costs You Money

If your payslip shows the BR tax code, it means all the income from that job or pension is being taxed at the basic rate, with no tax free Personal Allowance applied to it. Sometimes that is correct. Sometimes it means you are overpaying. This guide explains what BR means, when it is right, and how to reclaim tax if it is wrong.

What does the BR tax code mean?

BR stands for Basic Rate. A BR code means every pound from that source of income is taxed at the basic rate of 20 percent, with none of your tax free Personal Allowance (£12,570) applied to it.

The key point: BR does not spread your tax free allowance across this income. It assumes your allowance is being used elsewhere.

When BR is correct

A BR code is often correct when you have a second job or a second pension. Your tax free Personal Allowance is usually applied to your main job (on a code like 1257L), so HMRC taxes the second source fully at basic rate with a BR code. In that situation BR is doing the right thing.

When BR means you are overpaying

A BR code can cost you money if:

• It has been applied to your only or main job, so you are missing your entire tax free allowance and paying 20 percent on income that should be tax free.
• You started a new job and were put on BR before HMRC had your full details, and it was never corrected.
• Your circumstances changed and your allowance should now be applied to this income.

If your only income is taxed under BR, you could be overpaying by a significant amount, because you are losing the tax free allowance on the first £12,570 you earn.

How to check and fix it

Look at your payslip and your HMRC Personal Tax Account. If BR is on your main or only job and you are not getting your Personal Allowance anywhere, that needs correcting, and you can usually reclaim the tax you overpaid.

HMRC can update your code so the allowance is applied correctly going forward, and refund overpaid tax for the period you were on the wrong code, within the usual four year window.

Frequently asked questions

Is BR an emergency tax code?

BR is sometimes used as an emergency code when you start a new job, which is when it most often leads to overpaying until corrected.

My second job is on BR. Is that wrong?

Usually not. A BR code on a second job is normal, because your allowance is applied to your main job.

How much could I be owed if BR was wrong?

If your full allowance was missing, the overpayment can run into hundreds or more per year. You can reclaim across the last four years.

Can I get the overpaid tax back?

Yes. If BR was applied incorrectly, the overpaid tax can be reclaimed.

Think BR has cost you? Check it

If a BR code stripped your tax free allowance from your main income, you have overpaid and can claim it back.

Start your claim with TaxPro and we will check your tax code and reclaim what you are owed, on a no win, no fee basis.