What is a D1 Tax Code?

The code D1 is applied to only the highest earners.

All of your income from this job or pension is taxed at the additional rate. In the current tax year 2022/23 this is at the rate of 45%.

A D1 tax code is typically received when you have at least 2 sources of income.

Your other income plus this income is expected to exceed £150,000 in the current tax year 2022/23.

When earnings exceed £100,000 the personal allowance is reduced.

The personal allowance is reduced by £1 for every £2 over £100,000. As a result, you will receive no personal allowance when income exceeds £125,140.

A D1 code has income taxed at the highest rate which is 45%.

As an example a salary of £40,000 would pay income tax (PAYE) of £18,000. If paid monthly the net pay before National Insurance would be £1,833.

Tax code D0 and tax code D1 are very similar.

They both assume that other income is received.

A D0 code assumes that the total income will be below £150,000 (tax year 2022/23). Therefore the tax rate needs to be 40%.

The D1 code assumes total income exceeds £150,000 (tax year 2022/23), therefore a 45% tax rate is applied.

A D1 code would be issued when there are at least two sources of income. This could be either 2 jobs, 2 pensions or a combination of a job and a pension.

The total combined income should exceed the additional rate threshold, which in the current 2022/23 tax year is £150,000.

The D1 code is likely to be incorrect when there is either only one source of income or total income is below £150,000.

Update your tax code with HMRC via the HMRC website.

Alternatively phone HMRC on 0300 200 3300 and they will assist with your tax code.

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