D1 Tax Code Explained: What It Means and What to Do

A D1 tax code means every pound from that job or pension is taxed at the additional rate of 45%, with no tax-free personal allowance applied to it. HMRC issues the code when your other income has already used up that allowance and pushed your expected total earnings past £125,140.

Seeing D1 on a payslip means 45p in every pound of that income went to HMRC before it reached your bank account.

No tax-free slice at the start, no basic rate band, nothing charged at 20% or 40%. The whole amount is taxed at the top rate from the first pound.

That can be alarming to find. Whether the D1 tax code is correct comes down to one thing: what HMRC believes you earn across every job and pension you hold.

PAYE tax codes are issued one per income source, but you only get one personal allowance to spread between them. Once your main income has absorbed that allowance and every lower rate band with it, a second source has nowhere left to sit except the additional rate band.

What follows sets out why the code was issued, what it costs in real numbers, the specific circumstances that make it wrong, and how to check which of those applies to you.

Scottish and Welsh taxpayers use different letters for the same job, and those carry different rates, so they are covered separately.

Why HMRC gave you a D1 tax code

Two things have to be true at once before HMRC issues this code.

The first is that you are an additional rate taxpayer. For 2026/27 that means HMRC expects your total taxable income across all sources to clear £125,140. That threshold fell from £150,000 in April 2023 and has been frozen since, with the freeze now legislated to run until April 2031.

The second is that this particular income is not the one carrying your allowance. The personal allowance can only be set against one source at a time, and HMRC normally attaches it to whichever income it expects to be largest.

Put those together and the question “why have I got a D1 tax code” tends to answer itself. The circumstances that trigger it are:

• You hold a second job on top of a main salary that already exceeds £125,140.
• You draw a pension alongside continuing employment, and the employment holds your allowance.
• You have several PAYE sources running at once and HMRC has allocated the allowance to one of them.
• You started a new income stream partway through the year while your existing income already sat in the additional rate band.

In each case the mechanism is identical. D1 is the additional rate taxpayer tax code applied to whatever is left over once the allowance has been spoken for.

D1 vs D0 tax code: 45% or 40%

The D0 tax code works the same way at a different rate. Both strip out the personal allowance and tax everything from that source at a single flat percentage. The only question is which percentage.

HMRC’s PAYE manual sets out what each code does:

• BR taxes all income from that job or pension at the 20% basic rate.
• D0 taxes all income from that job or pension at the 40% higher rate.
• D1 taxes all income from that job or pension at the 45% additional rate.

Those three are the flat-rate codes; a full tax code list UK guide covers the suffixed and K codes as well.

Which one lands on your payslip depends on where HMRC expects your combined income to finish the year.

Comparing D1 vs D0 tax code outcomes on the same second income shows the gap plainly: on £20,000, D0 takes £8,000 and D1 takes £9,000.

Where your total income sits between £50,270 and £125,140, D0 is the code that fits. Above £125,140, it is D1. A switch between the two partway through a year normally means HMRC has revised its estimate of what you will earn.

How much tax a 45% tax code takes

The arithmetic is blunt, because a 45% tax code leaves no room for anything else. The D1 tax code additional rate applies from the very first pound of that income.

Take a second income of £2,000 a month, so £24,000 across the year. At 45%, income tax on it comes to £10,800, leaving £13,200. Month by month, that is £900 deducted and £1,100 reaching your account.

Nothing is sheltered. On a standard 1257L tax code the first £12,570 would be tax-free and the next slice charged at 20%, but none of that applies here, because the allowance and the lower bands are already committed elsewhere.

Two things that figure leaves out. National Insurance is worked out separately and comes off on top. So do student loan repayments, if you have them. The 45% covers income tax alone.

D1 tax code personal allowance: there is none

There is no D1 tax code personal allowance. That is the defining feature of the code rather than a quirk of it: D1 exists precisely to tax income where no allowance remains available.

The allowance matters at these income levels for a second reason, and it catches people who only watch their main payslip.

The GOV.UK guidance on Income Tax rates and Personal Allowances confirms the personal allowance falls by £1 for every £2 that adjusted net income rises above £100,000, reaching zero at £125,140.

Run that through and something awkward appears in the band between. An extra £2 of income is taxed at 40%, which is 80p. The same £2 also strips away £1 of allowance, and that £1 is now taxed at 40% too, another 40p.

Total tax on £2 of additional income: £1.20. An effective marginal rate of 60% on everything between £100,000 and £125,140.

Above £125,140 the allowance has gone entirely, the 60% band ends and the rate settles at 45%. D1 is the tax code for income over £125,140, applied to whichever source is not holding the allowance.

Scotland and Wales use different prefixes

Scottish taxpayers have codes carrying an S prefix and Welsh taxpayers a C. This is where a reasonable assumption goes badly wrong, because SD1 is not the Scottish version of D1.

Scotland operates six income tax bands rather than three, so it needs more flat-rate codes. HMRC’s PAYE manual lists them:

• SD0 taxes all income from that job or pension at the Scottish intermediate rate of 21%.
• SD1 taxes all income from that job or pension at the Scottish higher rate of 42%.
• SD2 taxes all income from that job or pension at the Scottish advanced rate of 45%.
• SD3 taxes all income from that job or pension at the Scottish top rate of 48%.

The Scottish code matching D1 on rate is therefore SD2, not SD1. The code occupying the equivalent position at the very top of the Scottish scale is SD3, charging 48%.

Either way, a Scottish taxpayer who reads a D1 guide and assumes the S version behaves identically is out by three percentage points.

A separate guide to tax codes in Scotland covers the S prefix across every band. Wales is more straightforward, since Welsh rates currently match those in England and Northern Ireland. CD1 taxes all income from that job or pension at the Welsh additional rate of 45%, the same figure as D1.

When a D1 tax code is wrong

The code reflects what HMRC has been told about your income. Problems start when what HMRC has been told is out of date.

Circumstances worth checking against your own position:

• Your income fell during the year and HMRC’s estimate still reflects the higher figure.
• The job or pension that was holding your allowance has ended, leaving the allowance unclaimed.
• A one-off bonus or pension lump sum inflated last year’s total and this year’s code was built on it.
• The code was carried forward from a year when you genuinely did clear £125,140, and your circumstances have changed since.
• This is your only source of income, in which case the code is almost certainly wrong.

That last one deserves emphasis. The code is designed for a secondary source. If it is sitting on your only job or pension, something has gone astray, and it is worth acting quickly, since a wrong tax code refund takes time to work through.

D1 W1 and D1 M1 explained

You may see the code written as D1 W1, D1 M1 or D1 X. These are emergency tax codes, and the suffix changes how the calculation runs rather than the rate charged.

A normal code is cumulative, so your employer looks at everything you have earned and paid across the tax year to date, and an overpayment in one month corrects itself in the next.

W1, M1 and X codes treat each pay period in isolation. Nothing corrects automatically, and an overpayment simply repeats until the code is changed.

How to check my D1 tax code

An HMRC tax code check takes a few minutes and needs no paperwork. Four places show the code:

• Your payslip, where the code usually sits near your National Insurance number.
• Your P2 coding notice, the letter HMRC sends when it issues or changes a code.
• The Check your Income Tax service on GOV.UK, showing your allowance, your code and the tax paid so far.
• The HMRC app, which pulls through the same information.

The personal tax account tax code screen is the one worth spending time on, because it lists every income source together. Seeing them side by side is what tells you whether the allowance is sitting where it should be. Checking a single payslip in isolation cannot do that.

One point trips people up here. Being an additional rate taxpayer does not by itself mean you have to file a tax return.

For taxpayers whose income is dealt with entirely through PAYE, the income threshold for self assessment was removed from 2024/25 onwards.

Untaxed income from property, dividends or savings can still require a return, but the salary figure alone no longer triggers one.

How to change my D1 tax code

Changing the code means telling HMRC what has changed, since it can only work from the information it holds.

Contact HMRC through the Check your Income Tax service, through the app, or by phone, and set out the current position on every job and pension you have.

GOV.UK says a code update can take up to 35 days to reach your employer. Deductions carry on at 45% until it lands, so the sooner HMRC holds the full picture, the shorter that gap. Tax overpaid while the wrong code was running can still be recovered afterwards.

Your next step

A D1 tax code is not a penalty and not automatically an error. It is what HMRC applies to a secondary income once your allowance and every lower band are committed to your main one, taxing that source at 45% from the first pound.

Whether it is right for you comes down to two questions. Does HMRC’s estimate of your total income genuinely clear £125,140, and is this genuinely a secondary source?

If the answer to either is no, the code needs changing. Scottish and Welsh taxpayers should check the prefix as well, because the letters carry different rates.

The quickest way to settle it is to view every income source in one place through a personal tax account, then contact HMRC if the picture does not match. There is a separate guide on what to do about a wrong tax code.

Key Takeaways

Everything above, condensed to the points that decide whether your code is right:

• A D1 tax code taxes all income from one job or pension at the 45% additional rate, with no personal allowance applied to it.
• HMRC issues it when your expected total income clears £125,140 and your allowance is already attached to a different source.
• D0 does the same job at 40%, and a switch between the two signals that HMRC has revised its estimate of your earnings.
• Between £100,000 and £125,140 the withdrawal of the personal allowance produces an effective marginal rate of 60%.
• SD1 is the Scottish higher rate at 42%, not the Scottish equivalent of D1; SD2 charges 45% and SD3 charges 48%.
• A four-year window applies to reclaiming overpaid tax, counted from the close of the year it happened in.

Common D1 tax code questions

The questions below go beyond “what is a D1 tax code” or “what does tax code D1 mean” and cover situations HMRC guidance addresses separately.

How much tax do I pay on D1 tax code income if I only work part of the year?

The rate does not change. Every pound paid through that source is charged at 45% for as long as the code is in force, whether that is one month or twelve. Working part of a year does not produce a lower rate on a D1 code, because the code carries no allowance and no lower bands to spread across the months.

What can change is whether that turns out to be the right amount overall. If your actual income for the full year came in below £125,140, tax was deducted at a rate your circumstances did not justify. HMRC picks that up at the year-end reconciliation and issues a P800 calculation where a repayment is due.

Can I claim a refund on a D1 tax code?

Yes, where the code took more tax than your circumstances warranted. The route depends on timing. Within the current tax year, correcting the code usually lets your employer refund the difference through payroll, so no separate claim is needed.

For a closed year, HMRC compares tax deducted against tax due and issues a P800 where a repayment is owed. These are sent between June and March following the end of the tax year. If no P800 arrives and you believe you have overpaid, you can approach HMRC directly rather than waiting.

There is a deadline. Claims must be made within four years of the end of the tax year in which the overpayment arose, after which that year closes permanently.

Is D1 tax code correct when I have just started a new job?

On a genuinely new job it is worth questioning, because HMRC needs a full picture of your income before it can allocate codes correctly. A new employer who has not received your details may operate an emergency code while that picture is assembled.

The detail to look for is whether D1 appears on its own or with a W1, M1 or X suffix. The plain code suggests HMRC has made a deliberate allocation based on income it already knows about. A suffix suggests the calculation is running non-cumulatively while things settle.

Can pension contributions change my D1 tax code?

They can affect the calculation that sits behind it. GOV.UK guidance on adjusted net income confirms that pension contributions reduce the figure HMRC uses to decide how much personal allowance you keep, alongside reliefs such as Gift Aid donations.

Because the allowance is withdrawn on income above £100,000, contributions made in that band can restore some of it. The effect flows through to your codes, though not always immediately and not always to the source carrying D1. Anyone using contributions deliberately for this purpose should confirm their own position with HMRC, since the calculation depends on how the scheme gives relief.

What happens to my D1 tax code if my second job ends?

The code does not switch off by itself. It stays attached to that employment record until HMRC updates it, which matters if you later start something new with the same employer or restart the same role.

More importantly, ending the source that held your personal allowance leaves the allowance unallocated. Telling HMRC promptly lets it be reassigned, and prevents a situation where allowance goes unused while another source continues to be taxed at 45%.