The 0T1 tax code means your employer has been told to tax every pound you earn with no personal allowance, and to calculate each payslip on its own without looking back at what you’ve already earned or paid in the tax year. You lose the £12,570 tax-free amount, and the payroll system can’t smooth things out over the year, so short-term overpayment is common. In most cases the code is a placeholder HMRC uses when information is missing, and once you give them what they need it can be corrected and any excess tax refunded.
What the Two Parts of the Code Are Doing
The “0T” prefix sets your personal allowance to zero for this employment. Sometimes that reflects reality (see high earners below), but more often it means HMRC or your employer simply doesn’t have enough information to give you a proper code, so payroll defaults to treating every pound as taxable.
The “1” suffix, which may show up on your payslip as W1, M1, or X, puts you on a non-cumulative basis. Normally PAYE is cumulative: your employer looks at your year-to-date pay and tax and adjusts each payslip to keep you on course for the right annual bill. On a Week 1 or Month 1 basis, that history is ignored. Each pay period is calculated as if it were the first of the year, with the annual tax bands sliced into weekly or monthly portions.
The combination is what makes 0T1 sting. No allowance, and no ability to self-correct from prior months. If you were on a normal cumulative code earlier in the year and then flipped to 0T1, payroll won’t credit you for tax already paid, and the overpayment builds up until the code is fixed.
Why You’ve Been Put on 0T1
A handful of scenarios cover most cases, and nearly all of them come down to missing information.
Starting a New Job Without a P45
The most common trigger. When you leave a job, your former employer gives you a P45 showing pay and tax to date. Start a new role without handing one over and your new employer has nothing to feed into a cumulative code. HMRC’s guidance tells them to use an emergency code in that situation, and 0T1 is one of the codes they may apply.
A Second Job or Multiple Income Sources
The £12,570 personal allowance can only sit against one source of income at a time. If it’s already applied to your main job, HMRC will tell a second employer to use a code with no allowance. The 0T reflects that your tax-free amount is spoken for elsewhere, not that you’ve done anything wrong.
Incomplete Starter Information
New employers ask you to complete a starter checklist (formerly the P46). Leave it blank or tick the wrong box and payroll defaults to a restrictive code. It happens more than you’d think, usually because the form gets buried in first-day paperwork.
High Earners Whose Allowance Has Tapered Away
If your adjusted net income is over £100,000, your personal allowance shrinks by £1 for every £2 above that threshold, and disappears entirely at £125,140. For people in that bracket, 0T is not an error. It accurately reflects that no tax-free amount is due.
Flexible Pension Withdrawals
Pension providers often apply an emergency code the first time you take a flexible payment, because they know nothing about your other income. You may see 0T1 or a similar code on that payment. The deduction is frequently too high on lump sums, because the system assumes you’ll take that same amount every month for the rest of the year.
How Much Tax 0T1 Actually Takes
With no personal allowance, the 2026/27 rates for England, Wales, and Northern Ireland apply from your first pound of earnings:
- Basic rate of 20% on annual earnings up to £50,270
- Higher rate of 40% on earnings from £50,271 to £125,140
- Additional rate of 45% on earnings above £125,140
Because the code is non-cumulative, payroll divides those bands into weekly or monthly slices. Paid monthly, you get one-twelfth of each band per payslip. Earn more than £4,189 in a single month (one-twelfth of £50,270) and the amount above that gets taxed at 40% for that month alone, whatever happened in earlier months. If you live in Scotland your code carries an “S” prefix (for example, S0T1) and the Scottish bands apply instead, running from a 19% starter rate up to a 48% top rate above £125,140.
Your tax code affects income tax only. National Insurance is calculated separately, keeps its own thresholds, and doesn’t change because you’re on 0T1.
Getting the Code Changed
The quickest route is the “Check your Income Tax” service on GOV.UK, which you reach through your Personal Tax Account. Once signed in you can review your employment details, report a new job, confirm income estimates, and flag anything wrong. HMRC then issues a corrected code straight to your employer.
If you’d rather talk to someone, call the HMRC Income Tax helpline. Have your National Insurance number ready, along with your employer’s details and your most recent payslip. If you have a P45 from a previous job that you haven’t yet handed over, give it to your new employer as soon as you can. That one document often contains everything needed to move you off the emergency code.
Once HMRC processes the change they send a revised code to your employer and a P2 Notice of Coding to you, which breaks down how the code was calculated. Your employer’s payroll should pick it up on the next available pay run, subject to their cutoff dates.
Getting Overpaid Tax Back
If you’ve been on 0T1 for any length of time and your correct code should have included a personal allowance, you’ve almost certainly overpaid. How you recover it depends on timing.
During the Tax Year
If HMRC issues a corrected cumulative code partway through the year, payroll automatically recalculates your tax from the start of the tax year. The excess is refunded through your next payslip, sometimes producing an unusually large net pay that month. You don’t have to make a separate claim.
After the Tax Year Ends
HMRC reviews PAYE records after each tax year closes on 5 April. If you’ve overpaid, they send a P800 tax calculation, usually between June and March of the following year. The letter tells you either to claim online (bank transfer or the HMRC app) or that a cheque is on its way. You’ll need the P800 reference number and your National Insurance number to claim online.
If no P800 arrives and you think you’re owed money, start a claim yourself through the GOV.UK “Claim a tax refund” service. Pension lump sums taxed on an emergency code have their own forms, letting you reclaim in-year rather than waiting: P55 for partial withdrawals, and P50Z or P53Z for full withdrawals.
If You File Self Assessment
Any overpayment is reconciled through your return. The return captures all your income and tax paid, and HMRC either refunds the difference or offsets it against other tax you owe.
Mistakes That Keep People Stuck on 0T1
The biggest one is assuming your employer will sort it out. Your employer applies whatever code HMRC issues. They can’t change it on their own, and most payroll departments won’t chase HMRC for you. Fixing a wrong code is on you.
Another is ignoring the P2 Notice of Coding because it looks like junk mail. That plain-looking letter is your chance to catch problems early. If the allowances or income figures don’t match your situation, contact HMRC before the wrong code costs you months of overpayment.
People with more than one job sometimes assume the personal allowance is split automatically. It isn’t. If you want it divided across two jobs you have to ask HMRC to do it. Otherwise your second employer keeps using a code with no allowance, and you may pay more tax in-year than you need to, even if it evens out at year-end.