BR Tax Code: A Complete Guide

Have you ever looked at your payslip and wondered what the ‘BR’, which is written near your tax code means? You are not alone if you do not know about this term. In this article, we are going to talk all about BR Tax Code and related concepts. Have a look:

What is a BR Tax Code?

The ‘BR’ means ‘Basic Rate’. It is a tax code that tells your employer to tax all your income from that job at the basic rate, which is usually 20%. So, if you earn £1,000, you will pay £200 in tax.

Why Do I Have a BR Tax Code?

There are a few reasons why you might have a BR tax code:

  • You have changed jobs and have not yet given your P45 to your new employer.
  •  You have more than one pension or job.
  •  You are receiving a pension while still working.
  •  You have switched from being self-employed to employed.

Is a BR Tax Code Bad?

Not, it does not always mean you will pay too much tax. However, it is important to check because it does not consider your tax-free Personal Allowance.

How to change my BR tax code

Changing your BR tax code is a straightforward process. Here is what you need to do:

  1. Check that HM Revenue and Customs (HMRC) has the correct information about your income. This is important because HMRC usually updates your tax code automatically when your income changes.
  2.  You can use the Check Your Income Tax online service to update your employment details or tell HMRC all about an income change that has affected your tax code.
  3.  If you prefer, you can also contact HMRC by phone to discuss your tax code. The number to call is 0300 200 3300.
  4.  If you have recently changed jobs, give your P45 to your new employer. This document contains the information needed to set the correct tax code.
  5. If the tax office has the wrong code for your taxes, they’ll usually fix it by themselves after they get all the information about what you earn. This might take about one or two months to happen.
  6.  After you report your change, HMRC will contact you to see if they have changed your tax code. They will also inform your pension provider or employer. 
  7. Your next payslip should show your new tax code and any adjustments to your amount if you were paying the wrong tax amount

How Can I Avoid or Fix a BR Tax Code?

If you want to avoid getting a BR tax code, give your P45 to your new employer when you start a job. If you think your tax code is wrong, you can contact HMRC, and they will sort it out. Usually, it gets corrected automatically after a while.

Can I Get a Refund?

Yes, if you have paid too much tax because of a BR tax code, you might get a refund. This can happen during the current tax year or at the end of the tax year.

Can I get a BR tax code tax rebate?

Yes, if you have been on a BR tax code and it asked in you paying too much tax, then you might be allowed to a rebate. Here is how it works:

  • During the Current Tax Year: If they fix your BR tax code this year, you’ll generally get back any extra tax you paid through your salary, as long as your tax code adds up your income over the year.
  •  For Previous Tax Years: When the tax year ends, the tax office checks everything to make sure you paid the right amount. If you paid too much, they will send you a P800 form between June-October. This form explains how they figured out your refund. Then, they will mail you a cheque or deposit the money directly into your account.

If you believe you are due a rebate, you can contact HMRC or check your tax details using HMRC’s online services. 

Some Questions

What does ‘BR’ in my tax code stand for?

BR stands for Basic Rate, which means all your income from that job is taxed at the basic rate, usually 20%, without any personal allowance.

Why do I have a BR tax code?

You might have a BR tax code if you have multiple jobs, started a new job without a P45, or have other income like a pension.

Will having a BR tax code mean I pay more tax?

If applied incorrectly, a BR tax code could mean you are not using your personal allowance, which may result in more tax being paid.

What should I do if I think my BR tax code is wrong?

Check your income details with HMRC and contact them if necessary. They can adjust your tax code and inform your employer.

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