What is a D0 Tax Code?

The tax code D0 is one of the popular tax codes for higher earners.

Any income received will be taxed at the higher rate of income tax. In the current tax year 2022/23 this is at a 40% tax rate.

No personal allowance is being received. This is the tax free amount you can earn before income tax is payable. Typically, this is due to having another source of income.

With a D0 code the full amount earned is taxed at 40%.

As an example a salary of £40,000 would pay income tax (PAYE) of £16,000. As a result, if paid monthly the net pay before National Insurance would be £2,000.

A D0 code is typically received when you have at least 2 sources of income.

Your other income has used up the personal allowance and this additional income is to be taxed at the higher rate.

The higher rate threshold in the current tax year 2022/23 is £50,270.

For example you have other income totalling £54,000. Any further income would be given a D0 code and taxed at the higher rate of 40%.

Code D0 and code BR are very similar.

They both assume that other income is received, which uses up the personal allowance.

However BR code assumes that the total income will be below £50,270. Therefore the tax rate needs to be 20%.

The D0 code assumes total income exceeds £50,270, therefore a 40% tax rate is applied.

HMRC look at all income sources and then allocate tax codes accordingly.

To receive a D0 tax code you would typically have more than one source of income and total income exceeding £50,270.

You will need to phone HMRC on 0300 200 3300 and confirm your income or contact HMRC via the website.

By providing HMRC with up to date details of your income, it will enable HMRC to ensure that the correct tax codes are issued.

See our blog on UK Tax Codes Explained? It is a simple guide on all of the various tax codes issued in the UK.