0T Tax Code: Meaning, Cost, and How to Fix It

The 0T tax code means your income from that job or pension is taxed with no personal allowance at all, so tax is charged from the very first pound you earn. Under the standard 1257L code the first £12,570 is tax-free; under 0T, none of it is.¹ It usually appears because HMRC doesn’t yet have enough information to work out your allowance, or because your allowance has already been used somewhere else. For most people it’s temporary, and fixing it often triggers a refund.

What the Code Means on Your Payslip

The “0” stands for a £0 tax-free allowance. Numbers in a tax code are multiplied by ten, so 1257L gives you £12,570 free of tax and 0T gives you nothing. The “T” suffix tells your employer that HMRC needs to do further calculations before your allowance can be settled.¹

0T is different from flat-rate codes like BR, D0, or D1. Payroll still steps you through the normal rate bands (basic, higher, additional) as your earnings rise, but with no tax-free portion at the start. Scottish taxpayers may see S0T and Welsh taxpayers C0T; both mean the same thing, but the income runs through Scotland’s or Wales’s rate structure instead of the England and Northern Ireland bands.¹ In Scotland the top band reaches 48%, which matters if a large pension payout lands on S0T.²

Cumulative or W1/M1

Check whether your payslip shows 0T alone or 0T followed by W1 (weekly) or M1 (monthly). A plain 0T runs cumulatively: payroll looks at your year-to-date earnings and tax and reconciles each payment against the whole tax year. 0T W1 or 0T M1 is non-cumulative — each pay period is treated in isolation, with nothing rolled forward. That’s the version typically used as an emergency code while HMRC catches up, and it’s the one most likely to leave you overpaying.¹

Why You Might Be on 0T

There are four common reasons. Only one of them is meant to be permanent.

You Started a New Job Without a P45

When you leave an employer, they issue a P45 showing your earnings and tax paid so far in the tax year. If you begin a new job without handing this over, your new employer has no record of how much of your allowance has already been used. Payroll may default to 0T on a non-cumulative basis until HMRC sends the correct code.³ Completing a starter checklist for your employer lets them send the right information to HMRC.⁴

Your Allowance Is Already Used Elsewhere

If you have two jobs or two pensions, HMRC normally gives your full £12,570 allowance to the main source. The second one is often coded BR, D0, or D1 — but 0T can also be applied, especially when HMRC is reviewing how the allowance should be split.⁵

You Earn Over £125,140

The personal allowance is tapered above £100,000: you lose £1 of allowance for every £2 of income over that figure. By £125,140 the whole £12,570 is gone, and 0T is the correct code because there’s no allowance left to give.⁶ This is the one case where 0T isn’t an error.

You Took a Flexible Pension Withdrawal

Pension providers must apply emergency tax to your first flexible withdrawal because they don’t know your overall position. That often means 0T or 1257L on a month 1 basis, and the payroll system treats a one-off lump sum as if you’ll receive the same amount every month for the rest of the year. A single £30,000 withdrawal can be taxed as though the annual income is £360,000, pushing much of it into higher and additional rate territory.⁷

What 0T Costs You

On 0T, the standard income tax bands apply to your entire earnings without a tax-free buffer. For England, Wales, and Northern Ireland in 2025–2026:

Basic rate of 20% on the first £37,700 of taxable income
Higher rate of 40% from £37,701 to £125,140
Additional rate of 45% above £125,140⁶

A worked example makes the difference concrete. Someone on £30,000 a year with the standard 1257L code pays tax on £17,430 after the allowance. On 0T, they pay tax on the full £30,000 — roughly £2,514 more over the year. That money should come back once the code is corrected, but only after you act on it.

How to Get Your Tax Code Corrected

The quickest route is HMRC’s “Check your Income Tax” service, available in your Personal Tax Account on GOV.UK or in the HMRC app.⁸ You can see your current code, the income HMRC has you down for, and what allowances and deductions have been built in. If anything is wrong, you can update it there.

Before you begin, gather:

Your P45 from your previous employer if you have one. If you left a job and never received it, contact your former employer — HMRC lists this as the first step.⁸
Recent payslips showing year-to-date earnings and tax paid.
An estimate of your total income for the year across every job, pension, and other taxable source such as rental income or savings interest.

Once HMRC agrees the code needs changing, they send a new one to you and your employer within 15 working days.⁸ If you’re paid monthly, expect the corrected code on your next or second payslip; if weekly, around the third.

How to Reclaim Overpaid Tax

If you’ve been on 0T when you shouldn’t have been, you’ve almost certainly overpaid. After each tax year ends, HMRC compares what you paid against what you owed and issues a P800 tax calculation letter if you’re due money back.⁹

If your P800 says you can claim online, you can request a bank transfer or cheque through your Personal Tax Account or the HMRC app. Some P800 letters state that a cheque will arrive automatically with no action from you.⁹

You don’t always have to wait for year-end. If your code is corrected mid-year and you’re on a cumulative basis, payroll recalculates what you should have paid so far and spreads the refund across your remaining pay periods.

Pension Withdrawals Have Their Own Forms

If overpayment came from a flexible pension withdrawal, you can’t rely on future payslips to balance things out. Use form P55 if you took a partial withdrawal and left money in the pot. Use P50Z if you’ve emptied the pot and stopped working, or P53Z if you’ve emptied the pot but still have other taxable income.⁷

The general deadline for reclaiming overpaid income tax is four years from the end of the tax year in question. Overpayments from 2025–2026, which ends on 5 April 2026, must be claimed by 5 April 2030. After that, the money stays with HMRC.

1
GOV.UK. Tax Codes – What Your Tax Code Means
2
Gov.scot. Scottish Income Tax 2025 to 2026 Factsheet
3
GOV.UK. Understanding Your Employees Tax Codes – What the Letters Mean
4
GOV.UK. Tell HMRC About a New Employee – Late P45 or Starter Checklist
5
GOV.UK. How Tax Works if You Have More Than One Job
6
GOV.UK. Income Tax Rates and Allowances for Current and Previous Tax Years
7
GOV.UK. Claim Back Tax on a Flexibly Accessed Pension Overpayment P55
8
GOV.UK. Tax Codes – If You Think Your Tax Code Is Wrong
9
GOV.UK. If Your Tax Calculation Letter P800 Says Youre Due a Refund