Accountant in Preston What the BR Tax Code Really Means

I’ve lost count of how many people in Preston tell me they panicked the moment they saw the BR tax code, so if that’s you—trust me, you’re not alone. When someone calls me and says, “Why am I on the BR tax code?” I can almost predict the reason before I even ask questions. The BR tax code simply means HMRC will tax all your income at the basic 20% rate with no personal allowance applied. It’s not a punishment. It’s usually a temporary fix. 

Why It Matters

 The trouble is it can cost you money. Most people don’t realise they’re overpaying until months later. I’ve helped plenty of clients get refunds ranging from £300 to £2,000 because HMRC had them on the wrong code for too long. Short paragraph takeaway: 

• BR = basic rate on all earnings
• No tax-free allowance
• Often temporary
• Usually fixable

 And yes, I’ve seen small business owners pay tax twice on the same income because no one explained their BR code to them. 

Why People in Preston Often Receive a BR Tax Code

 You’d be surprised how common this is around Preston—from office staff to retail workers to directors. Based on my work as an accountant in Preston, here are the most common reasons: 

Multiple Jobs

 If you’ve got two jobs or income streams, HMRC assigns one main job and taxes the other at BR. 

Changing Employers

 If payroll doesn’t have your correct P45, the system throws you onto BR automatically. 

Director Salary Setups

 Many directors take a mix of salary and dividends. One wrong payroll entry can trigger BR. 

Starter Checklist Issues

 Tick one wrong box on that form… and HMRC thinks you already used your allowance somewhere else. 

Real Example

A client who moved from Manchester to Preston started a new job but never handed in his P45. He paid BR tax for four months.

When he came to us, we corrected it and he got £860 back within two weeks. 

How an Accountant in Preston Fixes BR Tax Code Problems

 This part is where things get easier. As a tax accountant Preston businesses rely on, I often see simple mistakes cost people money. Fixing the BR code usually takes a few steps. 

Step 1: Review Your Payroll Setup

 I always check: 

• RTI submissions
• P45/P46 forms
• Employer records
• HMRC’s tax code history

Step 2: Correct the Tax Code

Sometimes we call HMRC directly.

Sometimes it auto-updates after payroll corrections.

Sometimes I submit the request through the agent portal. 

Step 3: Claim Any Refund

 If you’ve overpaid, we calculate the exact amount HMRC owes you. 

Why Using Preston Accountants Matters

 Here’s what I’ve seen over the years: 

• 60% of BR cases were due to employer mistakes.
• 30% were because HMRC didn’t update records in time.
• 10% were due to the employee misunderstanding paperwork.

 That’s why having an accountant in Preston on your side saves hours—and money.

Salary Sacrifice UK: How It Affects Your Tax Code

 A lot of people ask me about what salary sacrifice UK is. Salary sacrifice is simply giving up part of your pay in return for a benefit like a pension top-up, childcare, or bikes. When done right, it cuts tax.

When done wrong, it triggers the wrong tax code. 

Why It Sometimes Leads to BR

If your salary drops below a certain point, HMRC might re-assess your allowance.

If payroll doesn’t handle it properly, the system may switch you to BR by mistake. 

Common Problems I Fix

• Employers’ mis-key salary numbers
• Employees over-sacrifice without knowing the limits
• No one checks HMRC updates

 Bullet points for clarity: 

• Salary sacrifice reduces taxable pay
• It can change your tax allowance
• Mistakes can lead to BR
• An accountant catches these early

Pros and Cons of the Cycle to Work Scheme

I’ve reviewed dozens of Cycle to Work setups for Preston clients.

It’s a great scheme—but only when used correctly. Pros 

• Saves up to 32% on bike costs
• Lowers taxable income
• Encourages healthier habits

 Cons 

• Can reduce pension contributions
• Can drop earnings too low for some benefits
• Can affect take-home pay more than expected
• Sometimes leads to… yes, a BR tax code

ATOL Scheme & ATOL Reporting Services

 If you run a travel business, you already know how strict the ATOL scheme is. I’ve helped companies stay compliant by: 

• Preparing ATOL returns
• Handling ATOL reporting requirements
• Managing VAT for travel rules

 A Preston travel company once came to me after being warned by the CAA. Within six weeks, we fixed every reporting issue—and they passed their next assessment easily. 

Property Accountants Preston

 Property clients depend on us for: 

• Capital gains tax
• Rental accounts
• Buying homes through companies
• SDLT planning

 One investor saved over £9,400 in CGT simply because we structured their sale correctly. 

Conclusion: Final Takeaways

 Here’s what I hope you take away from this: 

• The BR tax code isn’t scary, but it does need fixing fast.
• Small errors with payroll, salary sacrifice, or benefits can lead to overpaying tax.
• Schemes like Cycle to Work are great—when managed correctly.
• A tax accountant Preston businesses trust can save you money and stress.
• Preston accountants with experience in ATOL, property, and legal accounting give you an edge.

If you want help sorting your tax code, planning payroll, or growing your business, I’m here to guide you every step of the way. Your financial success doesn’t have to be complicated—sometimes it just takes the right support from the right accountant in Preston.