The “0T” tax code is one of the most misunderstood aspects of the UK tax system. Many taxpayers find themselves confused when this code appears on their payslip.
0T tax code is a temporary measure used by HMRC when they lack sufficient information about your income. Understanding what it means can save you money and stress.
The 0T tax code essentially means you receive no personal allowance. This results in all your income being taxed from the first pound earned.
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What Does 0T Actually Mean in Your Tax Code?
The letters in 0T serve as HMRC’s coding system indicators.
The “0T” tax code is essentially a default tax code used by HMRC when one or more of the following happens; when your personal allowance has been used up. when you’ve started a new job and your new employer does not have your tax code details.
The 0T code functions like a cautious approach to tax collection. HMRC ensures they don’t miss tax whilst determining your correct position.
Remember that, 0T isn’t an emergency tax code. It’s used when no Personal Allowance is applied—typically because the allowance is used elsewhere or a new job started without full details—so all income is taxed from the first pound.
Note: If you search for “OT Tax Code” on the HMRC website, you may not find any results. The correct and official tax code used by HMRC is 0T (zero followed by the letter T), not the letter “O”. This code is applied when your personal allowance has been fully used or when HMRC does not have enough information to assign your correct tax code.
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Why Have I Been Given an 0T Tax Code?
HMRC assigns 0T codes during specific circumstances requiring immediate tax collection. New employment situations represent the most frequent trigger.
Starting a new job without providing P45 documentation commonly causes this. Your new employer lacks your complete financial history initially.
Missing or delayed tax information creates assignment gaps. HMRC uses tax codes 0t whilst gathering necessary employment details.
If you only have single PAYE income, this code probably isn’t accurate. It removes your tax-free personal allowance unnecessarily in such cases.
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Common Scenarios for 0T Tax Code Application
| Feature | 0T Tax Code | BR Tax Code |
|---|---|---|
| Personal Allowance | Removed | Removed |
| Tax Rate Structure | Variable (20%, 40%, 45%) | Fixed (20%) |
| Predictability | Unpredictable | Consistent |
*Note: For most additional jobs, HMRC typically uses BR, D0, or D1 codes. 0T may be used if there is missing or unclear information about multiple incomes.
0T codes are usually temporary and often resolved within 1-3 months after submitting the correct documentation to HMRC. This timeframe can vary depending on how quickly HMRC receives and processes your information.
How Does the 0T Tax Code Impact Your Payslip?
The 0T tax code creates immediate financial consequences for your take-home pay. Your personal allowance essentially takes a holiday during this period.
Normally, £12,570 of your income remains tax-free for 2025/26. Under 0T, every penny you earn faces immediate taxation.
Higher tax deductions occur because taxation starts from pound one. Your net pay decreases noticeably compared to standard codes.
This particularly challenges those relying on specific take-home amounts. Budget adjustments may become necessary during 0T periods.
For example, a basic rate taxpayer earning £25,000 annually would normally pay tax only on £12,430 after personal allowance. Under 0T, the full £25,000 is taxed, increasing monthly tax deductions significantly.
How Much Tax Will You Pay Under an 0T Code?
Tax calculations under 0T codes depend entirely on your total income level. The code applies progressive tax rates from the first pound earned.
Basic rate taxpayers earning £25,000 annually face taxation on the complete amount. Normally, only £12,430 would be taxable after personal allowance.
Higher earners experience more significant impacts from 0T codes. More income gets taxed at higher rates without allowance protection.
The tax floodgates essentially open from your first pound of earnings. This creates substantial differences compared to standard tax calculations.
For the 2025/26 tax year, the rates are: Basic rate 20% on income up to £37,700; Higher rate 40% on income from £37,701 to £125,140; Additional rate 45% on income above £125,140. Under the 0T code, these rates apply progressively without any personal allowance deduction.
What’s the Difference Between 0T and BR Tax Codes?
Both 0T and BR codes remove your personal allowance protection. However, they operate through different mechanisms entirely.
The BR code applies a flat 20% basic rate across all income. It’s typically used for second jobs or additional income sources.
0T codes function as chameleons, changing tax rates based on total earnings. Higher earners face increased tax rates under 0T codes.
BR provides predictable taxation at basic rates only. Paye code OT can apply basic, higher, or additional rates depending on circumstances.
| Feature | 0T Tax Code | BR Tax Code |
|---|---|---|
| Personal Allowance | Removed | Removed |
| Tax Rate Structure | Variable (20%, 40%, 45%) | Fixed (20%) |
| Typical Use | Temporary emergency situations | Second jobs/pensions |
| Predictability | Unpredictable | Consistent |
Unlike BR, which taxes all income at a flat 20%, 0T applies the full progressive tax rates without personal allowance, making 0T potentially more costly for higher earners.
HMRC’s Tax Alert System
HMRC has implemented various alert systems for taxpayers. These notifications help identify potential tax code issues.
As interest over the personal savings allowance (£1,000 for basic rate taxpayers) can lead to tax liabilities, especially for joint accounts. However, this is not specifically part of an “alert system” but rather a tax rule that HMRC may remind people about through campaigns or communications.
HMRC issues various forms of communication (emails, letters, online messages), but there is no official, named “tax alert system.” Instead, HMRC uses targeted campaigns (like “One to Many” campaigns), coding notices, and reminders. The language should be adjusted to reflect that these are notifications, not a formal “system.”
Taxpayers should monitor these alerts regularly to avoid missing important updates or falling victim to scams.
How Can You Change from 0T to Your Correct Tax Code?
Changing from 0T requires providing HMRC with complete income information. The process involves several straightforward steps.
Start by gathering essential tax documents including P45 and P60 forms. These documents provide the breadcrumbs leading to your correct code.
Ensure your employer receives all updated tax information promptly. Sometimes updating employer records resolves the issue immediately.
Contact HMRC directly if employer updates don’t work. Have your National Insurance number and income details ready.
Quick Action Checklist
✓ Gather P45, P60, and recent payslips
✓ Update employer with correct tax information
✓ Contact HMRC with National Insurance number ready
✓ Provide complete income and employment details
✓ Follow up to confirm tax code changes
Secondary Tax Codes and Related Issues
The UK tax system includes various tax codes for specific situations. BR (Basic Rate) and NT (No Tax) codes serve different purposes: BR taxes all income at 20%, usually for second jobs or pensions; NT means no tax is deducted.
On some occasions a BR or paye code HMRC can be used to collect emergency tax. Understanding these distinctions helps taxpayers navigate the system.
Each secondary code has specific applications and implications. Knowledge of these codes prevents confusion and ensures proper tax planning.
There are no hybrid OT codes like OT1 or OT/1. These are not recognised by HMRC and should not be referenced as official codes.
- 0T is the correct emergency tax code with no personal allowance.
- OT1 or OT/1 are not recognised by HMRC and should not be referenced as official codes.
- Suffixes like M1, W1, or X indicate non-cumulative emergency tax treatment, not partial personal allowance or multiple income streams
Conclusion
The 0T tax code is usually temporary and happens when HMRC does not have proper information about your tax situation. This could mean that you do not have any personal allowance, so your tax would be high. However, this can be easily fixed if you give your employer your P45 or complete a starter checklist, contact HMRC if your employer can’t help or keep your payslips until it’s resolved.
0T tax code – FAQs
What does OT tax code mean in the UK?
The 0T code means each pound of your income will be taxed. Generally, there is a tax free allowance for the people but in 0T your income is taxed from the first pound itself.
Why do I have an 0T tax code on my payslip?
If your employer have not given you P45, he does not have enough information to assign the correct code or you have already used your personal allowance elsewhere are the probable reasons of 0T tax code on your payslip.
What is the PAYE 0T code explanation for new employees?
For the new employees, it can be used as a temporary measure when your employer does not have enough information to assign you 0T code.
What is the list of common 0T tax codes in the UK?
The common list of 0T tax code in the UK are as follows:
- 0T: No personal allowance; all income taxed.
- 0T W1/M1: No personal allowance, taxed on a weekly/monthly basis (non-cumulative).
- BR: All income taxed at 20% (basic rate), usually for second jobs.
- D0/D1: All income taxed at higher or additional rates.
How to find your PAYE tax code from HMRC?
You can find it on your Personal Tax Account online, or on a coding notice sent by HMRC.
What is the tax code BR meaning for second job?
The BIR tax code means all income from that job is taxed at the basic rate (20%) with no personal allowance. This is common for second jobs.
What is tax code 0T1 and when is it applied?
OT1 is a variation of the OT code, indicating no personal allowance is applied. It’s typically used when there’s insufficient information to assign your actual tax code, often in new or additional employments.
What is the 0T tax code UK meaning and when it is used?
The 0T tax code means no personal allowance, so all your income is taxed at the appropriate rate. It’s used when you haven’t provided a P45, your employer lacks information, or your allowance is used up.
What is the HMRC 0T tax code meaning and how to change it?
The 0T tax code is a default code used by HMRC when they can’t determine your correct tax code. To change it, provide your employer with your P45 or complete a starter checklist, or contact HMRC to update your records.
How to activate your PAYE code for a new job?
To activate your PAYE code, give your new employer your P45 from your previous job, or complete a starter checklist if you don’t have one. This allows your employer to request and apply the correct code.
What is 0T emergency tax code and how to stop it?
Although 0T is sometimes called an “emergency” code, it is not officially classified as one. To stop being taxed under 0T, make sure your employer has your correct tax details and contact HMRC if necessary.
What does 0T noncum tax code mean?
A 0T noncum (non-cumulative) tax code, such as 0T W1 or 0T M1, means tax is calculated on each pay period separately, not accounting for previous earnings in the tax year.
What does 0T mean in tax code letters?
0T in a tax code means zero tax-free allowance, so all your income is taxed without any personal allowance deducted.
What is tax code 0T meaning if no P45 provided?
If you start a new job and do not provide a P45, your employer may use the 0T tax code. This ensures tax is deducted, but you may pay more until your correct code is assigned.
Parul is a dedicated writer and expert in the accounting industry, known for her insightful and well researched content. Her writing covers a wide range of topics, including tax regulations, financial reporting standards, and best practices for compliance. She is committed to producing content that not only informs but also empowers readers to make informed decisions.
