BR tax code

BR stands for basic rate. A job with a BR code has no tax-free allowance, so payroll takes 20% of every pound you earn there. It is the normal code for a second job or a workplace pension paid alongside a salary, because your £12,570 Personal Allowance has already gone to your main job. It is wrong when that second job is actually your only job, or when your main job earns less than the allowance.

Why second jobs get BR

You only have one Personal Allowance. HMRC gives it to the job it thinks is your main one, usually the one that pays most, as a code such as 1257L. Every other job gets a code that charges tax from the first pound:

• BR: all pay taxed at 20%
• D0: all pay taxed at 40%, used when your main job already takes you past £50,270
• D1: all pay taxed at 45%, used when your total income is over £125,140.

This is common in the public sector. Nurses and healthcare assistants doing bank shifts at their own trust often have the bank work on a separate payroll record with a BR code. Teaching assistants with a lunchtime supervisor contract at the same school, or support staff with an evening job elsewhere, are in the same position. Tax on NHS bank shifts covers the bank arrangements in detail.

A worked example where BR is right

Say you earn £32,000 in your main job on 1257L and pick up £4,000 of extra work elsewhere on a BR code.

• Main job: £32,000 minus £12,570 = £19,430 taxed at 20% = £3,886.
• Second job: £4,000 taxed at 20% = £800.
• Total income tax: £4,686.

If you had earned £36,000 from one job, the tax would be (£36,000 minus £12,570) × 20%, which is also £4,686. BR is simply the right answer when your allowance is fully used elsewhere.

When BR is wrong

Your main job pays less than the allowance

Say you have two part-time jobs, one paying £9,000 on 1257L and another paying £7,000 on BR. The first job uses only £9,000 of your £12,570 allowance, leaving £3,570 unused. The second job is taxed at 20% on all £7,000, which is £1,400.

Your correct tax on £16,000 of total income is (£16,000 minus £12,570) × 20% = £686. So you would overpay £714 over the year unless the allowance is split.

You can ask HMRC to split your allowance across the two jobs. They would give the first job enough allowance to cover its pay and put the rest on the second job’s code. Do this through your HMRC personal tax account (update the estimated income for each job) or by calling HMRC.

You no longer have another job

If you left your first job and only the BR job remains, the code needs to change to 1257L or similar. This often happens when someone moves from a substantive post to bank-only work, or from a salaried job to a single supply agency. Tell HMRC the old job has ended; your old employer’s leaving date should also reach HMRC through payroll, but not always quickly.

The codes are the wrong way round

If HMRC has given the allowance to the smaller job and BR to the larger one, the total tax for the year may still come out right, but your pay will look odd and any month without shifts in the smaller job wastes allowance. Ask HMRC to swap them.

BR from a starter checklist

When you start a job and tell the new employer you have another job or a pension (statement C on the starter checklist), payroll puts you on BR straight away, without waiting for HMRC. That is correct if you really do have another job using your allowance. If you tick C by mistake when the new job is now your only one, you will pay 20% on everything until HMRC sends a new code.

BR on a pension

People who retire from the NHS, teaching or local government and keep working part-time often get BR on either the pension or the wages. The allowance can go on whichever pays more. The State Pension is paid without tax being taken off, so HMRC usually reduces the allowance on your other income to collect tax on it; that can lead to a lower number or, in some cases, a K code. See K tax codes.

Checking and fixing it

Look at your HMRC personal tax account. It lists each job or pension, the code on each, and the income HMRC expects from each. If the expected income for a job is far off (common with irregular bank or overtime work), update it. HMRC uses those estimates to decide where your allowance goes.

If you have overpaid on a BR code during the year, a corrected code in the same tax year should refund it through payroll. If the year has ended, HMRC reconciles your record and you can claim; see claiming a tax refund. For the wider picture, including National Insurance on two jobs, read tax when you have two jobs.