A D0 tax code (D-zero) means every pound of that income is taxed at the higher rate of 40%, with no Personal Allowance applied. It is the higher-rate cousin of the BR code, where BR taxes everything at 20%, D0 taxes everything at 40%.
This is part of our UK tax codes explained series.
What does D0 mean?
The D prefix means a single flat rate applies to the whole of this income, and 0 points to the higher rate (40%). There is no tax-free slice and no movement up through the bands, it is a flat 40% on everything paid under that code.
Why do I have a D0 tax code?
D0 usually appears on a second job or second pension when your main income already uses your Personal Allowance and fills the basic-rate band. In that situation every extra pound you earn really would be taxed at 40%, so HMRC codes the second source at D0 to collect the right tax as you go, rather than leaving you with a bill.
Is a D0 code right for me?
D0 is correct only if your other income genuinely reaches into the higher-rate band. If your total income is lower than HMRC assumed, perhaps your main job has dropped, D0 will over-tax the second source. The codes step with your rate:
What to do if the code is wrong
If you think your tax code is wrong, do not just wait, an incorrect code is corrected from the date HMRC updates it, and any over- or under-payment is squared up afterwards. Steps to take:
- Check your latest tax code notice (the "PAYE Coding Notice", form P2) in your HMRC personal tax account. It shows how the code was built up.
- Compare it to your real situation, one job or several, any benefits in kind, untaxed income, or earlier-year underpayments being collected.
- Check your total income, D0 is only right if your other earnings already use your allowance and the basic-rate band. If they do not, ask HMRC to recode.
- Tell HMRC if anything is out of date, online, via the HMRC app, or by phone. They will issue a revised code to your employer.
- Watch your next payslip to confirm the new code has been applied and any refund has come through.
Frequently asked questions
How much tax does D0 take?
A flat 40% of the income paid under that code, with no tax-free amount, so £1,000 of pay means £400 of tax.
What is the difference between D0 and D1?
D0 taxes everything at the higher rate (40%); D1 taxes everything at the additional rate (45%). D1 is for income stacked above the additional-rate threshold.
Can a D0 code be wrong?
Yes, if your overall income does not actually reach the higher-rate band. Give HMRC your full income details and they will reissue a more accurate code.
Think your tax code is wrong? It is one of the most common payroll errors, and HMRC will not always spot it for you. Zmartly's Self Assessment and personal tax team can check your code against your circumstances and deal with HMRC on your behalf. Get in touch for a free review, or book a free Tax Health Check.
