Why is my tax code D1?

When D1 is the correct code

D1 is correct when:

• You have two or more jobs
• Your main job earnings exceed £125,140 a year
• HMRC has assigned D1 to the second job to capture the 45% additional-rate tax due on that income

Example: main job pays £180,000 a year (well into additional rate). Second job (e.g. directorship at a charity, occasional consultancy) pays £10,000. HMRC assigns D1 to the second job so the £10,000 is taxed at 45% = £4,500. This correctly captures the additional-rate tax without requiring Self Assessment.

Worked example — main job £180k + second job £10k on D1

If the second job were on BR (20%) instead of D1, the tax due on that £10,000 would be £2,000 instead of £4,500 — leaving a £2,500 underpayment to settle via Self Assessment.

When D1 is wrong

D1 is wrong if:

• You have only one job
• Your main job earnings are below £125,140
• You quit your main job (your remaining job should switch to a normal code)
• HMRC has misassigned codes between your jobs

What to do if D1 appears unexpectedly

Other UK tax codes explained

• What is a UK tax code? — the overview
• Why is my tax code 1257L? (the standard code)
• Why is my tax code BR? (basic rate)
• Why is my tax code 0T?
• Why is my tax code D0? (40% flat)
• Why is my tax code D1? (45% flat)
• K-prefix tax codes — negative allowance
• W1, M1 and X — emergency tax codes
• Why is my tax code NT? (no tax)
• T-suffix tax codes
• M and N — Marriage Allowance codes
• Tax code changed suddenly — what to do

Sources and methodology

D1 code rules from gov.uk/tax-codes. Additional rate threshold and PA taper from gov.uk/income-tax-rates.

UK Tax Drag is not authorised by the Financial Conduct Authority and does not provide regulated financial advice — see the content disclaimer for the full position. The methodology page documents how every calculator is built and reviewed.

D1 versus D0 — which one should be on your second job?

D1 and D0 are sister codes. Both withhold your Personal Allowance entirely and charge a single flat rate on every pound, but the rate is different and so is the situation that justifies it:

The logic is that your second income stacks on top of the first. If your main job has already used up the basic and higher-rate bands, the very next pound — including all of your second job — falls in the 45% additional-rate band, so D1 charges that rate from the first pound. If your main job only reaches the higher-rate band, the correct code is D0 (40%); drop below £50,270 and it should be BR (20%). Being on D1 when D0 or BR is correct is the classic over-deduction error this page warns about.

How D1 interacts with the £125,140 threshold and the £100k taper

The £125,140 additional-rate threshold is not a round number by accident — it is the point where the Personal Allowance taper finishes. Understanding the taper explains why D1 only makes sense once your main income is genuinely past £125,140.

• £100,000 — the taper begins. For every £2 of adjusted net income above £100,000, you lose £1 of Personal Allowance.
• £125,140 — the taper ends. By here the whole £12,570 allowance has gone (£12,570 × 2 = £25,140 of income above £100,000). From this point your code typically shows 0T on the main job, and any extra income is additional-rate — which is exactly what D1 collects on a second job.
• The 60% trap in between. Across the £100,000–£125,140 band you pay 40% on the income and lose allowance that gets taxed too, giving an effective marginal rate near 60%. A D1 second job does not change that; only reducing your adjusted net income (for example through pension contributions or Gift Aid) does.

So the threshold question for D1 is simply whether your main job's taxable income has cleared £125,140. If it has, the allowance is already exhausted and D1 on a second income is correct. If it has not, you still have allowance and/or basic- and higher-rate band to spare, and D1 will overtax you.

Why Self Assessment often replaces D1 in practice

D1 is a blunt instrument: it assumes a clean 45% is due on the whole second income and nothing about your wider tax position. For most people at this income level that is an oversimplification, which is why HMRC frequently uses 0T on the second job and squares everything up through Self Assessment instead.

• Additional-rate taxpayers usually have to file Self Assessment anyway, so the precise tax is settled on the return regardless of the PAYE code.
• Reliefs that change the final bill — higher- and additional-rate pension relief, Gift Aid, EIS or VCT investments — cannot be reflected in a flat D1 code but are captured on the return.
• If your income fluctuates (bonuses, dividends, irregular consultancy), a fixed 45% code is rarely accurate month to month, whereas the annual return reconciles it.

The practical takeaway: a correct D1 code is not something to fix, but it is rarely the whole story for a high earner. Treat it as a withholding mechanism, and rely on your Self Assessment return — or your Personal Tax Account — for the accurate year-end position.