Does the D0 Code Mean You’re Overpaying Tax?
Not necessarily. The D0 tax code is designed to prevent underpayment by assuming your Personal Allowance is fully used on another income source typically your main job or pension.
However, in some cases, the D0 code may result in temporary overpayments, especially if your overall income doesn’t fully justify being taxed at the higher rate.
You may overpay tax under D0 if:
- Your combined income from all jobs and pensions doesn’t exceed the higher-rate threshold (£50,270 for 2025/26)
- You only work your second job part-time or seasonally
- You change jobs or income levels during the tax year and HMRC hasn’t updated your code yet
How overpaid tax is handled
HMRC usually automatically reviews your records at the end of the tax year (after 5 April) and may issue a tax refund if you’ve overpaid. This is done through a P800 tax calculation sent by post or through your Personal Tax Account.
If you prefer not to wait:
- Log in to your Personal Tax Account to update your income details and request a tax code review
- Or file a Self-Assessment tax return, particularly if you have multiple income sources, higher income, or other allowances to claim
Tip: Keeping your employment records and tax codes up to date throughout the year helps avoid surprise overpayments or underpayments.
What to Do If You Think Your Tax Code Is Wrong
If your payslip shows a D0 tax code and you believe it’s incorrect for example, if you’re not earning enough to be in the higher-rate band it’s important to take action quickly to avoid overpaying tax.
Where to check your current tax code:
- Your monthly or weekly payslip
- Your P60 (issued at the end of the tax year) or P45 (if you’ve left a job)
- Your Personal Tax Account on GOV.UK this will show your tax codes across all jobs and pensions
What to do if the code looks wrong:
Contact HMRC – Call 0300 200 3300 or use the Income Tax contact service to speak with HMRC directly. Be prepared with your National Insurance number and employer details.
Update your job details
- If you’ve started a new job, complete a Starter Checklist (available from your employer or GOV.UK)
- If you left a previous job, give your new employer your P45 so they can report your income correctly
Request a tax code correction
HMRC can review your records and issue a new tax code to your employer through a P6 notice this will automatically update your payroll deductions.
Tip: If you’ve already overpaid tax due to the wrong code, HMRC will usually issue a refund after the end of the tax year. Or you can claim it sooner through your Personal Tax Account or by filing a Self-Assessment return.
Claiming Back Overpaid Tax on a D0 Code
If you think you’ve paid too much tax under the D0 tax code, there are several ways to claim it back either automatically or by taking proactive steps.
How to reclaim overpaid tax:
- Wait until the end of the tax year (5 April) HMRC may issue a P800 tax calculation showing any refund due. If you’re eligible, you’ll be notified by post or through your Personal Tax Account.
- File a Self-Assessment tax return this is the quickest way to reconcile your total income and tax across all jobs or pensions and claim any overpaid tax.
- Apply for a refund online if you know you’ve overpaid and don’t want to wait, you can request a refund through the Claim a tax refund service on GOV.UK.
Mid-year tax code adjustments:
In some cases, if your income changes or you provide updated information (like a P45 or Starter Checklist), HMRC may issue a new tax code during the year. This will be sent to your employer and could reduce your PAYE deductions moving forward helping you recover any overpaid tax gradually.
Tip: Keep your records up to date in your Personal Tax Account to avoid delays or missed refunds.
How to Avoid D0 Errors on a Second Job
Starting a second job or taking on part-time work alongside your main income can trigger the D0 tax code, especially if HMRC doesn’t have complete information. To help avoid unnecessary higher-rate deductions, take these steps early:
What you should do:
- Provide a P45 from your previous employer when starting a new job this tells your new employer what tax code to use.
- If you don’t have a P45, complete a Starter Checklist (available from your employer or on GOV.UK) to ensure the correct code is applied.
- Inform HMRC that you have more than one job or income source. This helps them assign or adjust your tax codes appropriately.
- Check your tax code early in the tax year using your Personal Tax Account to avoid errors going unnoticed.
Can you split your Personal Allowance?
Yes if both of your jobs pay less than the higher-rate threshold (£50,270 for 2025/26), you can ask HMRC to split your Personal Allowance between them. This helps ensure you’re not overtaxed on either income and makes better use of your tax-free entitlement.
To request a split, contact HMRC directly or update your details through your Personal Tax Account.
Summary: D0 Tax Code Explained
| Item | Details |
| What it means | All income from this job taxed at 40% |
| Why it’s used | You’ve used your allowance on another job |
| Common scenarios | Second jobs, multiple pensions |
| Refunds possible? | Yes, if too much tax is deducted |
| How to check or correct it | Use GOV.UK or call HMRC |
D0 Tax Code Conclusion
The D0 tax code plays an important role in ensuring the correct tax is paid across multiple jobs or income sources, but it can sometimes lead to confusion or unnecessary overpayments if not properly managed.
By understanding how it works, checking your tax codes regularly, and keeping HMRC informed, you can stay on top of your tax obligations and avoid surprises at the end of the year.
If you’re unsure whether your D0 code is correct or think you may be due a refund taking action early can save time, money, and stress.
