UK Tax Codes · 2026/27
D1 Tax Code Meaning — Additional Rate (UK 2026/27)
Who gets the D1 tax code?
D1 is reserved for high earners with multiple income sources where the primary income has already crossed £125,140. Common examples: senior executives with both salary and substantial pension drawdowns, partners at law/accounting firms with multiple income streams, or wealthy retirees with pension and investment income above the threshold.
How D1 affects your pay
Every pound of D1 income is taxed at 45%. No personal allowance, no basic-rate, no higher-rate band. The tax is collected purely at additional rate from the first pound. Plus there's a 2% NI rate above the upper limit (£50,270) if it's earnings rather than pension.
When to check this code
If you have D1, your total income is almost certainly above £125,140. Check it's correct by reviewing your other income sources to confirm they've already used the lower bands. If you don't have £125k+ income, D1 is likely wrong.
What to do if it's wrong
Wrong D1 codes can result in overpayment of about 25% of the income (45% taken vs 20% basic rate that should apply). Contact HMRC immediately, providing details of all income sources. They'll typically issue a refund for any overpayment.
Example calculation
On £25,000 from a D1-coded source (when main income is £150,000): D1 takes 45% × £25,000 = £11,250 in tax. This is correct — the £150k main income has used the personal allowance and basic/higher rate bands. Total income £175,000 owes £11,250 in additional-rate tax which D1 collects efficiently from the second source.
Recruiter pro tip
D1 is essentially a confirmation that you're a UK additional-rate taxpayer. If you receive D1, your total income is over £125,140 — at this level, the personal allowance has been fully tapered to zero, so missing 'allowance' from D1 is technically correct. Review pension contributions and salary sacrifice strategies — at 45% marginal, these have outsize value.
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