Tax Code BR Explained

Tax code BR (Basic Rate) UK 2025/26 — what it means, why second jobs use it, when it's wrong, how to switch back to 1257

Quick answer: BR means Basic Rate only: 20% tax on every pound earned, with NO personal allowance. Used for second jobs/pensions where your allowance is on a different income source. Wrong on a sole job — costs up to £2,514/year extra.
Mustafa Bilgic
Reviewed by Mustafa Bilgic · UK Calculator Editor ·

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BR is the UK's most misunderstood tax code. It's correct for second jobs but disastrously wrong if applied to your only income. Here's when BR is right, when it's wrong, and how to fix it.

How tax code br explained works in 2025/26

BR = "Basic Rate" — every pound of your pay from this employment is taxed at 20%, regardless of total amount. There is NO personal allowance applied. Why? Because HMRC assumes your £12,570 allowance is being used elsewhere.

When BR is correct:

  • You have a main job using your full personal allowance (1257L) and a smaller second job
  • You receive a pension as well as employment income
  • You're an additional employee at one company that already has your main job

When BR is WRONG (and costs you money):

  • BR is your only income — you're losing £2,514/year (20% of £12,570 PA)
  • You started a new job without giving P45 — usually 1257L M1 should apply, not BR
  • Your second job pays MORE than your "main" job (then ask HMRC to swap them)
  • You stopped your main job — BR sticks unless you tell HMRC

How to fix wrong BR:

  1. Sign in to Personal Tax Account
  2. Click "Update employment" → declare which job is your "main"
  3. HMRC issues correct code within 1–4 weeks
  4. Overpaid tax auto-refunded via next payslip

Worked example: Main £30,000 + Second £10,000 BR — correct

Main: 1257L → £3,486 tax. Second: BR (20% × £10,000) = £2,000 tax. Total £5,486. Same as if all £40,000 on one job.

Gross: £10,000 → Take-home: £8,000.00/year (£666.67/month)

Worked example: BR as only income £25,000 — WRONG

BR taxes all £25k at 20% = £5,000. Correct 1257L would tax only £12,430 at 20% = £2,486. Overpaid £2,514/year.

Gross: £25,000 → Take-home: £19,005.60/year (£1,583.80/month)

Worked example: Pension £15,000 BR + Earnings £20,000 1257L — correct

Earnings: 1257L gives PA, tax £1,486. Pension: BR taxes £15,000 at 20% = £3,000. Total £4,486 — matches single £35k taxation.

Gross: £15,000 → Take-home: £12,000.00/year (£1,000.00/month)

Frequently asked questions

What does tax code BR stand for?
BR = Basic Rate. All your income from this employment is taxed at 20% (basic rate) with no personal allowance applied. It assumes your £12,570 PA is being used by another job or pension.
Is tax code BR an emergency code?
BR can be an emergency code if applied incorrectly to your only job — meaning you have no allowance applied anywhere. Otherwise (as a correct second-job code), it's permanent and not an emergency.
How much tax do I pay on BR?
Exactly 20% of your earnings from this employment. £100 gross = £80 net (before NI). £1,000/month gross = £800 net (before NI). NI is calculated separately and still has the £242/week threshold.
Why is my second job on BR?
Because your main job (or pension) uses your £12,570 personal allowance. HMRC defaults second jobs to BR to avoid double-allowance which would underpay tax. If your second job pays more than your main, you can ask HMRC to swap.
Can I split my personal allowance between two jobs?
Yes — call HMRC on 0300 200 3300 and request "split allowance". They'll issue something like 700L on Job A (£7,000 PA) and 557L on Job B (£5,570 PA). Useful if both jobs are similar pay.
What's the difference between BR and 0T?
BR taxes everything at 20% only. 0T uses full bands (20%/40%/45%) with no allowance. So 0T is worse for high earners — at £60,000 BR taxes you £12,000 vs 0T which taxes you £15,432.
How do I change from BR to 1257L?
If BR is on your only job, log into your Personal Tax Account and update your employment status to "this is my only job". HMRC will reissue 1257L within 4 weeks and refund overpaid tax via PAYE. Or call 0300 200 3300.

Official UK Sources

Last reviewed: May 2026 against HMRC 2025/26 rates.

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