Incorrect Tax Code? How to Fix It Fast in 2025

If you’ve just checked your payslip and something feels off — your take-home pay looks smaller, or a new tax code suddenly appeared without warning — you’re not imagining it. Incorrect tax codes still rank among the most common PAYE problems in the UK, and 2025 hasn’t changed that.

HMRC updates over 30 million tax codes every year, often automatically. Most of the time, they get it right. But when they don’t, you end up overpaying or underpaying tax without even noticing until months later.

This guide breaks down exactly what to do if your tax code is wrong — in plain English. No jargon. No confusing HMRC-speak. Just a clear, structured way to check your code, fix it, and make sure you’re not losing money. Let’s help you get your tax code back on track.

What Counts as an Incorrect Tax Code? (With Examples)

A tax code is “incorrect” when it doesn’t reflect your real circumstances, such as:

Your income
Benefits
Job changes
Pensions
Taxable perks
Personal allowance

A wrong tax code usually causes one of two problems:

1. You’re paying too much tax

Signs:

Sudden drop in take-home pay
Emergency codes like 0T, BR, D0, D1
No personal allowance applied
“Week 1 / Month 1” next to your code

2. You’re underpaying tax

Signs:

A very high personal allowance
Code includes “K” when it shouldn’t
HMRC letter saying you owe money
Underpayment included in your code unexpectedly

Common Incorrect Tax Codes in 2025

Code	Meaning	Why It Might Be Wrong
BR	All taxed at 20%	Second job flagged incorrectly
0T / OT	No personal allowance	Employer error after job change
1257L W1/M1	Emergency code	HMRC couldn’t verify your income
K Codes	You owe tax	Wrong estimated benefits or income
D0/D1	40% / 45% rates	HMRC thinks you have multiple jobs

How to Know If Your Tax Code Is Actually Wrong

Here are practical checks real people use:

Your pay suddenly dropped

This usually means:

Emergency code
Employer restarted your tax year
HMRC added an underpayment manually

You changed jobs and got BR or 0T

This happens when:

Your employer didn’t send your starter info
HMRC didn’t receive your P45

You got a coding notice you don’t recognise

HMRC may have estimated something incorrectly, like:

Company car
Private medical
Work benefits you no longer receive

Your pension is taxed wrongly

This is common with:

State Pension
Small private pensions
Multiple part-time jobs

If any of these apply, your tax code is likely incorrect.

Why Incorrect Tax Codes Happen (Real 2025 Reasons)

Tax codes normally go wrong due to:

1. Job changes not processed correctly

If a P45 or starter form is missing, employers often default to BR or 0T.

2. Multiple jobs or pensions

HMRC may apply your personal allowance to the wrong job.

3. Benefits estimated incorrectly

Company car values, fuel benefits, or medical insurance changes can trigger mistakes.

4. State Pension

HMRC often miscalculates it when adjusting your tax code.

5. Employer payroll errors

Sometimes your employer simply used the wrong code.

6. HMRC’s automatic updates

HMRC updates millions of codes without manual checking.

Also Check: Beat the Tax Year Chaos: UK Dates 2025/26 & 2026/27 Every Brit Needs

The 2025 Fast Fix Method: How to Correct an Incorrect Tax Code (5 Steps)

This is the simplest way to fix a wrong tax code — no stress, no guesswork.

1 — Check Your Code (1 minute)

Open your:

Payslip
P45/P60
Personal Tax Account (PTA) via Gov.uk

Your code is usually listed near your gross pay.

2 — Compare It With What It Should Be

Use these rules:

Most people should have 1257L
If you only have ONE job → 1257L
If you have TWO jobs → only ONE job gets 1257L
BR/0T on your main job = wrong
Emergency code (W1/M1) = temporary

If it doesn’t match your situation → incorrect tax code.

3 — Tell HMRC (fastest way)

Best method:

Your Personal Tax Account
(Gov.uk → Income Tax → Check your tax code)

Other methods:

Phone: 0300 200 3300
HMRC online form
Employer correcting PAYE submission

Tip: Calling before 10am avoids long waits.

4 — HMRC Updates Your Code

This usually takes:

2–10 days via online
Instant if HMRC updates it by phone
1–2 pay cycles before it appears on your payslip

5 — Check If You’re Due a Refund

You’ll get a refund if:

You were on BR/0T by mistake
Your personal allowance wasn’t applied
HMRC charged you emergency tax
An underpayment was removed incorrectly

Refund times:

Method	Timeframe
PTA via Gov.uk	3–5 days
Payroll correction	Next payslip
HMRC cheque	2–6 weeks

Employer vs HMRC: Who Fixes What?

Issue	HMRC fixes	Employer fixes
Wrong P45 info	❌	✔
Emergency code	✔	✔
Missing personal allowance	✔	❌
Wrong tax band	✔	❌
Payroll used wrong code	❌	✔
Underpayment flagged	✔	❌

Mini Case Study: A Realistic Example

Sarah, age 32, changed jobs in March 2025.
Her new employer accidentally put her on 0T W1/M1, meaning no personal allowance.

She paid £221 extra tax in one month.

What she did:

Logged into her Personal Tax Account
Reported the incorrect tax code
HMRC corrected it within 5 days
She received the refund in her April pay

This is the most common scenario — and the easiest to fix.

Common Mistakes People Make (Avoid These)

Ignoring BR/0T codes
Assuming “HMRC will fix it automatically”
Not checking payslips after a job change
Contacting employer instead of HMRC (wrong order)
Not using the Personal Tax Account
Forgetting that taxable benefits change the code

Checklist: How to Confirm Your Tax Code Is Correct

✔ Do you have the right personal allowance?
✔ Do you have only one main job?
✔ Has your employer processed your starter form?
✔ Did you update HMRC about job changes?
✔ Does your code match your taxable benefits?

If anything feels off → your code needs checking.

FAQS

Q1. How do I fix an incorrect tax code?

If your tax code is incorrect, log into your HMRC Personal Tax Account to report it, or call HMRC on 0300 200 3300. They will review your code and issue a corrected version to your employer. Your updated tax code should appear on your next payslip, ensuring you pay the right amount of tax in 2025.

Q2. Will I get a refund for emergency tax (BR or 0T)?

Yes. If you were placed on a BR or 0T tax code by mistake, HMRC usually refunds the overpaid tax automatically. Refunds are processed either through payroll by your employer or directly to your Personal Tax Account. Always check your payslip after HMRC updates your code to ensure you receive your refund promptly.

Q3. How long does HMRC take to update a tax code?

HMRC updates incorrect tax codes quickly. Online corrections through your Personal Tax Account usually take 2–10 days, while phone updates can be almost instant. Your employer applies the new code to your next pay cycle, ensuring accurate tax deductions without waiting until the end of the year.

Q4. What is the quickest way to contact HMRC about an incorrect tax code?

The fastest way is via your HMRC Personal Tax Account, where you can report errors securely. Alternatively, calling 0300 200 3300 before 10am often reduces wait times. This ensures HMRC receives your request directly and can quickly issue a corrected tax code to your employer.

Q5. Can my employer fix my tax code?

Your employer cannot change your tax code independently. They can only apply the code issued by HMRC. If your tax code is wrong, you must notify HMRC first. Once approved, HMRC sends the updated code to your employer, who will then apply it to your payroll.

Q6. Why am I on a BR tax code?

You may see a BR tax code if HMRC believes you have multiple jobs or your employer did not send your starter information. This code taxes all income at 20% without personal allowance. Correcting it requires HMRC approval, typically through your Personal Tax Account.

Q7. What happens if I ignore an incorrect tax code?

Ignoring an incorrect tax code can lead to overpaid or underpaid tax. Overpayments might be refunded later, but underpayments can result in HMRC demanding payment at the end of the tax year. Always review your tax code and payslips promptly to avoid unexpected bills.

Conclusion

Incorrect tax codes are frustrating, but they’re very fixable. With the 2025 Fast Fix Method, you can check your code, correct it with HMRC, and recover any tax you’ve overpaid — often within days.

As long as you keep an eye on your payslips and use your Personal Tax Account, you’ll stay ahead of any mistakes and avoid unexpected bills later.

If your income, job, or benefits change, take a moment to review your tax code. It’s one of the easiest ways to make sure you’re not paying more tax than you owe.