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How Tax Works on a Second Job in the UK – Complete 2025 Guide

16 days ago by Jawad Rehman

Understanding your tax code is crucial for ensuring you pay the right amount of income tax. The BR tax code often appears on payslips and can significantly affect take-home pay. In this guide, we explain what is BR tax code, when it applies, its implications, and the exact steps you can take to resolve it.

What is BR Tax Code?

The BR tax code stands for Basic Rate. It means that all your taxable income from a specific source is taxed at the basic rate of 20%, with no personal allowance applied. In other words, every pound you earn under this code is taxed immediately, without the tax-free threshold of £12,570.

Common reasons for being assigned the BR tax code include:

  • Having more than one job or pension.
  • Starting a new job without providing a P45 or P46.
  • Incorrect or missing payroll information.
  • Temporary measures by HMRC until your correct tax details are confirmed.

When Does the BR Tax Code Apply?

You may encounter the BR tax code in the following situations:

  1. Multiple Income SourcesIf you have more than one job, your main income typically uses your personal allowance. Secondary income is often taxed using BR to ensure tax is collected correctly.
  2. Pension PaymentsIf you receive a pension alongside earnings, HMRC may use BR for pension income while your salary uses your allowance.
  3. Incomplete Starter DetailsWhen you start a job and your employer lacks your previous employment information, HMRC assigns BR until accurate details are confirmed.
  4. Self-Assessment AdjustmentsHMRC may apply BR if you have underpaid tax in previous years, ensuring recovery via PAYE.

How the BR Tax Code Affects Your Pay

The BR code ensures every pound of taxable income is taxed at 20%, without deductions for personal allowance. This can lead to:

  • Overpayment of Tax – Common when BR is incorrectly applied.
  • Reduced Take-Home Pay – Immediate impact until corrected.
  • Delayed Refunds – Overpaid amounts are typically returned after HMRC review.

Fixing an Incorrect BR Tax Code

If you believe your BR tax code is wrong, take the following steps:

  1. Check Your Personal Tax AccountLog in to your HMRC Personal Tax Account to view your current code and income details.
  2. Provide Missing Information to Your EmployerSubmit your P45 or complete a new starter checklist to ensure payroll uses accurate information.
  3. Contact HMRC DirectlyCall HMRC on 0300 200 3300 with your National Insurance number, employer details, and income information.
  4. Request Backdated AdjustmentsIf you overpaid due to BR, HMRC can issue refunds either through payroll or direct payment.

Avoiding BR Tax Code Problems in the Future

  • Always provide your employer with a P45 when changing jobs.
  • Keep your tax account updated with job changes or new pensions.
  • Check payslips regularly to ensure your code is correct.
  • Notify HMRC immediately of any discrepancies.

Key Takeaways

  • What is BR tax code? It’s a code that taxes all income from a job or pension at the basic 20% rate, without personal allowance.
  • BR tax code is often temporary and can be corrected quickly by providing accurate information.
  • Regular checks on your payslips and HMRC account can prevent overpayments and ensure tax accuracy.