D0, D0-W1 and D0-M1

Nearly everyone is entitled to a tax-free personal allowance, which means that a certain amount of your earnings each year are paid to you without being taxed. However, a tax code that includes ‘D0’ means you do not receive any personal allowance with this employment. Instead, you pay tax at the higher rate of 40% on all of your gross income. If you’re in Scotland,  SD0 deducts tax on all your gross income at 21%.

Why is it allocated?

It usually means that you have another source of taxable income to which your allowance has already been allocated. For example, you may have an additional employer or receive a pension or state benefits.

If you’re on a D0 tax code, it’s usually because your second source of income is expected to take your total combined gross earnings to somewhere between £37,701 and £125,140, after any tax-free allowance has been deducted.

Is this the best tax code for me?

You only have one allowance for all of your income sources and you can choose which of them it’s allocated to. As a general rule, it should be allocated to the employer through which you earn the majority of your income. You may wish to consider asking HMRC to allocate your allowance to the umbrella company (KPPES Ltd).

If you don’t expect your earnings to reach the higher rate tax band, you should contact HMRC to query this tax code.

These figures are correct for the 2024/25 tax year.