Getting consistent work in the creative industry can be challenging, which is why many creative professionals juggle both employed and self-employed work – from actors taking theatre contracts to musicians working with orchestras. When you’re managing multiple income streams, understanding your tax code becomes crucial. This blog explains tax code 0T and what it means for your finances and taxes.
What is Tax Code 0T?
Tax code 0T is applied when HMRC lacks sufficient information about your income to give you a standard tax code. Under tax code 0T, you’ll pay tax on all your earnings without the usual personal allowance. Think of it as a temporary holding code while HMRC figures out your correct tax position. Once it has been corrected, you may be due a refund.
Common situations when you might see 0T tax code
You’re most likely to encounter 0T when:
– Starting a new employed role without a P45
– Taking on a second job
– Returning to work after a break
– Your employer doesn’t have enough information about your tax situation
For creative professionals combining self-employed and employed work, 0T often appears when starting a new PAYE contract. For instance, if you’re primarily a self-employed photographer who takes on a part-time teaching position, you might initially be put on 0T until your tax situation is clarified.
Frequently asked questions about Tax Code 0T
We can see from the questions that people search for on Google that tax code 0T often causes confusion, so here are the answers to some FAQs.
Why would I have an 0T tax code?
This usually happens when HMRC doesn’t have up-to-date information about your income. For creatives who switch between self-employed and employed work, this is particularly common.
Is 0T an emergency tax code?
While 0T is temporary, it’s not technically an emergency tax code. It’s a holding code used until your correct tax position is established.
How much tax will I pay on 0T?
Under 0T, you’ll pay tax on all your PAYE earnings at the basic rate without any tax-free personal allowance. However, if you’re self-employed, this only affects your employed income – your self-employed earnings are handled through self-assessment.
Can I claim back tax paid under 0T?
Yes. Any overpaid tax can be reclaimed either through PAYE once your correct code is applied, or through your self-assessment tax return. HMRC are quite good at giving automatic refunds when you’ve been on the 0T code, so you may not even have to request a refund. However, if you are still owed money, you can contact HMRC to make your tax refund claim.
How do I fix my 0T tax code to the correct tax code?
Contact HMRC with details of your previous income and current employment. If you’re combining employed and self-employed work, make sure HMRC understands your complete income situation.
What to do if you’re on 0T tax code
1. Don’t panic – it’s temporary
2. Gather your income information, including details of any self-employed work
3. Contact HMRC through your personal tax account
4. Keep track of tax paid under 0T for your self-assessment return
5. Consider speaking to an accountant if you’re managing multiple income streams
For creative professionals, it’s worth remembering that tax code 0T only affects your PAYE income. Your self-employed earnings are still declared and taxed through self-assessment. However, all income needs to be reported on your self-assessment tax return, and any tax overpaid through 0T can be rectified there. Need help managing your mixed income streams or understanding your tax position? At Green & Peter, we specialise in supporting creative professionals with both employed and self-employed income. Give us a call on 020 8446 8100 or complete our online form.