How D0 works mechanically
D0 is the flat-rate higher-rate code. Mechanics:
- No personal allowance applied to this income source
- Every pound taxed at 40% Income Tax
- National Insurance still applies separately to the same income
For a job paying £20,000 a year on D0:
- Gross: £20,000
- Income Tax: £20,000 × 40% = £8,000
- NI: separate calculation (still applies)
- After-tax: roughly £12,000 minus NI
If the same £20,000 had a 1257L code applied (and no other income existed):
- Personal allowance applied: £12,570 tax-free
- Taxable: £7,430
- Income Tax: £7,430 × 20% = £1,486
D0 on the wrong source would cost this person £6,514 extra per year.
When D0 is correct
D0 makes sense when:
- You have a main job earning £50,270+ that uses your personal allowance
- A secondary income source appears (second job, pension, sometimes contractor income)
- HMRC's view: every pound from the secondary source is in higher-rate territory
Example: - Main job: £65,000 with 1257L (personal allowance applied) - Second job: £8,000 with D0 (taxed at 40% throughout) - Total: £73,000; the secondary £8,000 is all in higher-rate band
Without D0, the secondary income would attract a tax-code calculation that's mechanically more complex (splitting the allowance or applying a tailored code).
When D0 is wrong
D0 is wrong if:
- It's your only income source — you'd be paying 40% on income that should be tax-free below £12,570 and 20% up to £50,270
- Your total income across all sources is below £50,270 — basic-rate applies to part of this income; D0 over-deducts
- The secondary income is small enough that combined total stays below £50,270 — same issue, on a smaller scale
If any of the above applies, HMRC has miscoded you and you need to fix it.
Worked example — D0 incorrectly applied to sole £25,000 job
Wrong code (D0): - £25,000 × 40% = £10,000 Income Tax (yikes) - Plus NI
Correct code (1257L): - £25,000 − £12,570 allowance = £12,430 taxable - £12,430 × 20% = £2,486 Income Tax - Plus NI
Overpayment: £7,514 per year if D0 is wrong on a sole £25,000 job.
You'd notice this fast — your take-home would be way below the expected ~£20,500/year on £25k gross.
Worked example — D0 correctly applied to a £10,000 second job
Main job: £55,000 on 1257L → already used personal allowance, basic + higher rate bands Second job: £10,000 on D0
D0 calculation on second job: - £10,000 × 40% = £4,000 Income Tax - Plus 2% NI (above the upper limit since combined income > £50,270): £200 - Net from second job: £5,800
This is correct. The second job's £10k all sits above £50,270 in the combined view, so 40% is the right rate.
How to spot a wrong D0
Three indicators:
- Your take-home doesn't match expectations — if D0 is on a £25k sole job, your monthly net will be around £1,400 instead of ~£1,700. Big gap.
- Your payslip shows ~40% deducted as Income Tax when you have no other income
- You only recently took on a second job but D0 was applied to your main one (HMRC sometimes flips which is "main")
The fastest sanity check: divide your annual Income Tax deduction by your gross. If it's around 40% and you have no other meaningful income, D0 is likely on the wrong source.
How to fix a wrong D0
- Log in to your HMRC Personal Tax Account at gov.uk/personal-tax-account
- Review the tax code for each employment source
- Update HMRC's view of your circumstances — confirm your main employment, declare or remove any second income
- Wait for the updated code — HMRC issues a new code to your employer, usually within 2-6 weeks
- Watch your next payslip — PAYE refunds in subsequent pay periods automatically (cumulative calculation catches up)
If self-service doesn't resolve it, call HMRC on 0300 200 3300.
D0 vs D1 — which higher band?
| Code | Rate | When applied |
|---|---|---|
| D0 | 40% | All income from this source in the higher rate band (between £50,270 and £125,140) |
| D1 | 45% | All income from this source in the additional rate band (above £125,140) |
D0 covers most "secondary job for high earner" scenarios; D1 is for additional-rate earners with secondary sources well above the £125,140 threshold. Read more about D1 →
Scotland and D0
Scottish taxpayers see codes like SD0 instead of D0. SD0 means every pound from this source is taxed at the Scottish higher rate (42% for 2026/27) rather than 40%. The mechanics are otherwise identical.
Scottish bands differ slightly: - Scottish higher rate of 42% kicks in at £43,663 (vs £50,270 in rUK) - So SD0 is more commonly issued at lower combined income levels
In short
Tax code D0 means every pound from this income source is taxed at the higher rate of 40% with no personal allowance. It's right for a second income when your main job already exceeds £50,270; wrong on your only income source. If your code looks wrong, the tax code checker → decodes it instantly and HMRC's Personal Tax Account is the fastest fix. For the full UK tax-code reference, see the tax codes hub →.