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.

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?

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

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 tax.

About the D0 tax code

The D0 tax code can be issued on a cumulative basis and on a week 1 / month 1 basis.

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 tax.

Use our Tax Code Breaker below to double check you’ve been assigned the right tax code.

Tax Code Breaker – The Letters

The first three usually apply when you have more than one pension or job:

BR – You are taxed at a basic rate of 20% on the income from this job or pension.

D1 – All this job/pension’s income is taxed at the additional rate of 45%.

L – You are allowed the basic Personal Allowance of £10,600.

Y – Your Personal Allowance is larger because you were born before the 6th April 1938.

T – Your Personal Allowance is worked out through your tax code using extra calculations. For example, if your income has exceeded that allowable for basic rate tax then your Personal Allowance would be reduced.

M – Marriage Allowance where you have been transferred 10% of your partner’s Personal Allowance.

N – Marriage Allowance where you have transferred 10% of your Personal Allowance to your partner.

OT – There are two possible reasons for this code. Firstly, that you have started a new job and not given your new employer the necessary details to establish a tax code or your P45. Secondly, your Personal Allowance has been used up.

NT – You are not paying any tax on this income.

Get out your payslip and get tax code cracking!

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.

Do you need to check your tax code?
Follow the link below to contact HMRC

More Tax Codes:

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