If you have been given a tax code notice and you are wondering ‘what does tax code BR mean?’ then here is an explanation.

The tax code letter BR stands for Basic Rate. This means that any earnings that you get under the employment (or pension) that has that tax code (and you may have different tax codes for different sources of income), will be subject to tax at the basic rate.

For the tax year 2018/19 the basic rate of tax is 20%.

Tax codes often have a number before them and then a letter but in this instance, as the number refers to how much personal allowance you have, there is no number, just the letters BR.

Normally you will be given a personal allowance (£11,850 for 2018/19) which means that you can earn that amount of money over the tax year without being charged tax on it.

So, with a tax code of BR, that personal allowance will not be applied to the earnings from that source. It may well be that your personal allowance has been used up elsewhere (another job for instance or another pension source) so you cannot also apply it to this source of income.

So if for example you earn £1600 in a month then you will be taxed £320 (20% of £1600) for that month.

In fact even if you earn enough that your earnings would normally be taxed at a higher rate then you will still be taxed at 20% on this tax code and any adjustments will either need to be made once the tax code is changed or through your tax return.

The tax code BR differs from the code 0T in that if you are on 0T you will be charged higher rate tax if your earnings enter into that bracket.

It is possible that you have been given this tax code incorrectly (if you have been given it and you don’t have any other source of income for example). In which case you should get in contact with HMRC as soon as possible so that you don’t end up paying too much tax.

You can call HMRC on 0300 200 3300.