BR tax code is one of the most used tax codes, but only some people knew about it. The employees within the United Kingdom are paid under Pay As You Earn (PAYE). They are provided with a UTR number that is used to determine the tax they need to pay on their income. In addition, every tax year, a tax-free personal allowance is provided to all taxpayers. So, in case you are on the tax code BR, you will pay twenty percent (basic tax rate) on your income. Continue reading this blog to know more about what is BR tax code!
Reduce your business burden by letting us manage & record your finances! Our team could help you claim what is rightfully yours! So, Contact us now!
What is BR Tax Code?
This tax code means that you will not get any tax-free personal allowance. You have to pay tax on your earnings at the basic rate of twenty percent (20%).In BR-W1 and BR-M1, the addition of W1 and M1 shows that your tax is either weekly or monthly; it is non-cumulative.
Key takeaway: The standard Personal Allowance is £12,570 for 2021- 2022, which is the amount of income you do not have to pay tax on.
Why is this Tax Code Allocated?
It is usually allocated because of the following reasons:
- You are going into PAYE employment from self-employment.
- You are given this tax code as your employer does not have sufficient details or a P45 to give you the correct code.
- When you have another source of taxable income to which your tax-free personal allowance has already been allocated such as a second job.
Can I Aquire a BR Code Tax Rebate?
It is crucial to get your tax code corrected as soon as possible in case you do not have a (BR) tax code. Otherwise, you will have to overpay tax as you are unable to receive your correct allowance.
As soon as you change your tax code, any overpayment of tax will be refunded for that year. You will also be repaid for the previous years in which you have a BR code.
How to Change my Tax Code?
All you have to do is provide a P45 or a completed P46 to your new employer in order to change your tax code.
Does a BR Code Always Wrong?
No, it is not always wrong. It means that you can not get your tax-free personal allowance on your salary. In case you get another job, you will only get a personal allowance on one of your jobs. Remember that you may not get the full advantage of personal allowance if you get it on a low-paid job.
Contact HMRC If you Have an Incorrect Tax Code
It is highly recommendable to contact HM Revenue & Customs if you doubt that you do have not a correct tax code. First, you will require your NI (National Insurance) number. Then they will ask you about your total income sources and your expected income from each source. These details will permit HM Revenue & Customs to make sure that the tax codes are accurate.
We hope now, you have understood what is BR tax code and what it is allocated. Having a BR code means you will not get your tax-free personal allowance. If you are allocated a BR code, then it is because of the reasons mentioned above. So, all you need to do is to make sure you have the correct tax code. Because the incorrect tax codes imply that you have either underpay or overpay tax. That is why we recommend you to contact HMRC immediately if your think your tax code is not correct or ask an expert to do it on your behalf!
Disclaimer: This article intends to provide general information based on what is BR tax code.