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bigduckontax
bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 3279
Experience:  FCCA FCMA CGMA ACIS
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I am interested to know know more about how the tax code

Customer Question

Sam, I am interested to know know more about how the tax code BRM1 works, as I was taxed on this code but was out of pocket by £658.25 last month in my monthly salary from my company
Submitted: 1 year ago.
Category: UK Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to explain the meaning of this coding.

A code BRM1 operates as follows:

The BR means that your employer will deduct tax at the basic rate (20%) on all your emoluments. Effectively you will not receive a personal allowance through your payroll.

The M1 means that the code will be applied on a Month 1 basis. As you are probably aware PAYE works on an accumulative system with changes in pay each month adjusting for the variations. On a Month 1 basis this does not happen, tax is deducted on the current period's pay and takes no account of past periods disbursements.

Your employer must operate the code supplied by HMRC. To get this changed you must approach your tax office with a view to variation; your employer cannot assist at all. As you are probably aware whenever a tax code is issued both the employer and the employee are notified but is by no means unusual for only one party to be notified. Your employer can operate a code supplied to them from a Form P2 sent to you, but again only operation the code on a M1 basis which is better than nothing!

I do hope that my reply has enlightened you. Once HMRC wake up and issue an appropriate tax code everything will correct itself and you should find yourself tax neutral at the end of the tax year.