A high rate tax code means your employer or pension provider has been told to deduct income tax at 40% (code D0) or 45% (code D1) on every pound you earn from that source, with no personal allowance applied. It almost always appears on a second job or a pension, because your £12,570 tax-free allowance has already been assigned to your main income. Getting one of these codes usually isn’t a mistake. It’s HMRC’s way of collecting roughly the right amount of tax across all your income sources so you don’t face a large bill after the tax year ends.
What D0 and D1 Actually Do
Under Pay As You Earn, your tax code tells your employer or pension provider how much income tax to withhold before paying you.1GOV.UK. How You Pay Income Tax – Pay As You Earn (PAYE) The standard code on a main job, 1257L, reflects the £12,570 personal allowance. A second source of income can’t use that allowance again, so HMRC assigns a flat-rate code that taxes everything from the first pound.
The three flat codes you’ll most often see are:
- BR taxes every pound at the 20% basic rate. This is the default on a second job when your combined income stays inside the basic rate band.
- D0 taxes every pound at the 40% higher rate. HMRC applies it when your combined earnings push the secondary income into the higher rate band.
- D1 taxes every pound at the 45% additional rate, used when combined income runs above £125,140.
All three give zero personal allowance on that income source, because the allowance sits with your primary job.2GOV.UK. Tax Codes – What the Letters Mean A related code, 0T, also gives no allowance but applies rates across all bands rather than a single flat rate. HMRC uses 0T when it doesn’t have enough information to pick a more precise code.3GOV.UK. Understanding Your Employees Tax Codes – What the Letters Mean
Why HMRC Has Given You a High Rate Code
The commonest trigger is simply having two active PAYE sources: two jobs, or a job plus a pension. Your main income takes the personal allowance, and the secondary source gets BR, D0, or D1 depending on where the combined total lands in the tax bands.2GOV.UK. Tax Codes – What the Letters Mean Someone earning £45,000 at their main job and £15,000 from a second job will see that second income sit entirely in the higher rate band, so it gets a D0 code.
Which code you end up with depends on the current thresholds. For 2025/26 and 2026/27, the England, Wales, and Northern Ireland bands are £12,571 to £50,270 at 20%, £50,271 to £125,140 at 40%, and above £125,140 at 45%. So a D0 code appears when your primary income has already used up the basic rate band, and D1 appears when it has already used up the higher rate band as well.
Company benefits like a car or private medical insurance can also push you toward higher-rate territory, though these usually reduce your main code’s number (or trigger a K code) rather than adding a D0 or D1 to a second source. If you’ve recently taken on a second job and the numbers in the paragraph above match your situation, the D0 or D1 is doing exactly what it’s designed to do.
Scottish Taxpayers: SD0, SD1, and SD2
Scotland sets its own rates, and Scottish taxpayers’ codes carry an S prefix. On a second job you may see SD0, SD1, or SD2 rather than D0 or D1.3GOV.UK. Understanding Your Employees Tax Codes – What the Letters Mean The Scottish bands for 2025/26 run through starter, basic, intermediate, higher (42%), advanced (45%), and top (48%) rates, with the higher rate starting at £43,663 rather than £50,271.4GOV.UK. Income Tax in Scotland – Current Rates Because the higher rate cuts in at a lower income, Scottish earners with a second job move into high-rate secondary codes at lower combined incomes than English or Welsh earners. Welsh taxpayers carry a C prefix but currently pay the same rates as England and Northern Ireland.
When the Code Is Wrong
A D0 or D1 code is wrong when the assumptions behind it no longer hold. The common cases:
- Your main job’s income has dropped, so your secondary income no longer sits in the higher or additional rate band.
- You’ve stopped one of the two income sources but HMRC still has both on file.
- The code was set using an inflated estimate of your main income, perhaps from an unusual bonus year.
- Your allowance is sitting on the lower-paying job, when it would be more useful on the higher-paying one.
If your combined income across both sources genuinely runs into the higher or additional rate band, the code is doing what it should, even if the deduction looks steep on a single payslip. The test is your total tax across all sources for the year, not the rate visible on any one payslip.
How to Check and Correct It
The fastest route is the “Check your Income Tax” service on GOV.UK. Sign in with your Government Gateway account and you can see your current code, update the income estimates for each job or pension, and tell HMRC about changes.5GOV.UK. Check Your Income Tax for the Current Year You’ll need your National Insurance number and reasonably accurate income figures for every source. A recent P60 or P45 makes those estimates easier.6GOV.UK. Your National Insurance Number
One limitation: if you pay income tax only through Self Assessment, you can’t use this service and will need to contact HMRC directly or handle the adjustment through your return.5GOV.UK. Check Your Income Tax for the Current Year
If you’d rather not go online, HMRC’s income tax helpline is 0300 200 3300, open Monday to Friday, 8am to 6pm. Written queries go to Pay As You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS, United Kingdom. Phone tends to be quicker for a straightforward code correction; the online service is better if you want to see how the code was calculated.
If you think the allowance is on the wrong job, you can ask HMRC to move it. Putting the personal allowance on your higher-paying source will usually reduce your overall tax across the year, though the total tax due doesn’t change if both sources sit inside a single band.
What Happens After the Code Changes
If HMRC agrees the code needs updating, they’ll issue the new code to you and your employer within 15 working days.7GOV.UK. Tax Codes – If You Think Your Tax Code Is Wrong Your employer applies it from the next pay run. Because PAYE runs cumulatively, a mid-year correction doesn’t simply change future deductions; the payroll software recalculates the tax owed for the year so far and adjusts accordingly. You may see a noticeably larger or smaller take-home figure in the first payslip after the change.
HMRC sends you the details as a P2 Coding Notice, which sets out your personal allowance, any reductions, and the resulting tax-free amount.8HM Revenue and Customs. PAYE11030 – Coding – Codes – How They Are Used and Calculated – P2 Notice of Coding Read it. If any income estimate or benefit value looks off, go back to the online service or ring HMRC before another pay cycle runs on the wrong code. Catching an error mid-year is much easier than reclaiming tax after April.
If the correction shows you’ve overpaid, the refund normally comes back through your next payslip. If you’ve underpaid by less than £3,000, HMRC usually collects the shortfall by adjusting next year’s code, spreading it in equal instalments across 12 months.9GOV.UK. Tax Overpayments and Underpayments – If Your Tax Calculation Letter (P800) Says You Owe Tax Larger underpayments have to be paid directly.