If your payslip shows the OT tax code, this means your income is taxed without any personal allowance. HMRC often does not have full information about your employment or tax status during this time and this usually happens when you’ve started a new job without your P45. With the OT tax code, all earnings becomes taxable income, thus creating higher deductions. This is applied temporarily until your employer receives updated tax code details from HMRC. If you are on the wrong OT code you should report it to HMRC and reclaim any overpaid tax.

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