What does a D0 tax code mean?

The D0 tax code means that you pay tax at the higher rate of 40% on all of your income.

HMRC issue the tax code D0 when income tax is owed at the higher rate and all of your tax free personal allowance is used against another source of income.

A D0 tax code assumes that you have no tax free personal allowance (which reduces your taxable income) and places all of your income in the higher rate tax band.

For example if you earned £50,000 and your employer has applied a D0 tax code against your salary you will be deducted £20,000 in income tax.

Why have I been given a D0 tax code?

The D0 tax code is typically issued by HMRC to individuals who have other sources of income that fully use up their tax free personal allowance and basic rate tax relief which is given at a rate of 20%.

Common situations where a D0 tax code is issued include:

  • Where a person is simultaneously employed and running a self employmed sole tradership
  • Receiving pension income.
  • Working in more than one employed job under PAYE.

Should I have a D0 tax code?

This depends on your own set of circumstances. If you have income which should be taxed fully at 40% then the D0 code should normally be used.

It is important to check to make sure the code is correctly used especially if you have additional income from a pension for example.

If the D0 code is used you can be owed a tax rebate, BUT if it is not used when it should be you will not be paying enough income tax.

About the D0 tax code

The letters specifically refer to your financial situation and how it relates to your personal allowance.

The personal allowance is how much you are able to earn before you have to pay any income tax.

If you have income under PAYE and the tax code of D0 is used you won’t receive any tax free element on that income.

The D0 tax code can be issued on a cumulative, weekly (week 1) or monthly (month 1) basis.

How do I check my D0 tax code?

If you suspect an error in your tax code you should check your personal tax account (or HMRC app) for details on how your tax code has been calculated.

You can also consult with your employer to make sure they have all the necessary documentation (like a P45) from you and ask them if they expect any adjustments to your D0 tax code in the near future.

HMRC let you check what your current years tax code should be online by accesssing your online government gateway account.

How do I change my D0 tax code?

To change your tax code you will need to contact HMRC who can check and amend your tax code over the phone or online.

It’s advisable to reach out directly to HMRC via phone at 0300 200 3300 or you have the option of utilising their online income tax service by logging into or creating a new personal account.

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