What is an OT Tax Code?

What is an OT Tax Code?

The OT tax code says that you cannot make use of any tax-free personal allowance. It is possible that you will have to pay higher income tax if you do not have a tax-free personal allowance. It could be due to the fact that you've already exhausted the personal allowance you have or your employer does not have the proper information to issue you the tax code. The average Personal Allowance for the UK is PS12,570. It is the minimum earnings up to which you are not required to contribute tax. Although it appears to be just a random assortment of numbers and letters, your tax code plays a crucial role in determining the amount you are required to pay to HMRC.

HMRC will do everything it can to ensure that you receive the accurate tax code. It issues millions of tax codes every year, meaning there is a possibility of errors. It is your obligation to notify HMRC that you're on the incorrect tax code.



These are the primary reasons you may be offered your OT taxes:

  • You've just begun your new job. There is no the p45 form you need to provide the new company.

  • You didn't finish the P46

  • Your allowance for tax-free use has been utilized

  • You've just begun working with a new employer and you're not able to provide all the details your employer must have to be able to give you a tax code.

How much income tax will I have to pay with the help of an OT tax Code?

What you make will be the amount you have to pay.

If you're a citizen in Northern Ireland, Wales, or England then you'll have to pay:

  • 20% of incomes up to PS37,700.

  • 40% of earnings between PS37701 and PS150,000.

  • 45% of earnings over PS150,000.

  • If you're an resident of Scotland then you'll be charged:

  • 19% of incomes as high as PS2,162.

  • 20% of earnings between PS2,163 - PS13,118.

  • 21% of earnings between PS13.119 and PS31.092.

  • 41% of earnings between PS31,093 to PS150,000.

  • 46% of earnings that exceed PS150,000.


How to find out if you are on an 0T tax code?

You can find out if you are on the 0T tax code by logging into your government gateway account on HMRC, or giving HMRC a call.

 Why may you have an 0T tax code?

There are three main reasons for HMRC lumping you with a 0T tax code:

  • You haven’t given your new work your P45 from your old job and haven’t filled in a P46

  • You have used all your tax-free personal allowance

  • Since you started working at your new job, you haven’t given them all the information they need to give you the correct tax code

 What's the Difference Between OT and BR Tax Codes?

Both OT or BR tax codes provide an allowance for personal tax-free. In the BR tax code taxes your earnings in the standard rate (20 percent if you earn below PS37700). The OT tax code is, however, taxing you at base (20 percent) as well as higher (40 percent) rates as well as higher tax rates (45 percent).

Be aware that if your annual income is lower than PS37700, and you pay only the base tax rate, then there is no difference among both the BR and OT tax codes.



Is 0T an emergency tax code?

Yes. HMRC will apply a 0T emergency tax code under certain cases (which we take a look at later in the guide).

What Happens If You Don't Pay Enough Tax?

HMRC will revise your tax in the event that they discover that you are not paying tax due to any reason. If you owe more than PS3000 the tax authority will issue a tax notice.

How Do I Change My Tax Code?

You can correct errors in tax codes, if you discover it. You can fix the error online, over telephone or by contacting an accountant.

Online Method

You'll require an access to an account on your account on the HMRC website. This allows you to verify and amend your tax code and inform HMRC of any modifications regarding your tax number and get an estimate of tax you'll have to pay for the tax year.


By Using Your Phone

You can alter the tax codes of your employees by calling HMRC on 0300 283 3300. They are open Monday through Friday, between 8:00 am until 9:00 midnight. If you contact them, make certain you've got the National Insurance Number.

Consult a Tax Accountant

This option has the benefit that your tax accountant will make sure that you're tax-compliant and that you haven't paid excessive tax. They can also assist you prepare your tax returns swiftly and effectively.