Tax Code C0T Explained

What does C0T mean?

C0T identifies you as a Welsh taxpayer in 2026/27. Income-tax administration was partially devolved to the Senedd in 2019, but the Welsh Government has so far chosen to set the Welsh rates of income tax (WRIT) at the same level as rUK. The practical effect is that a C-prefixed code currently produces the same take-home pay as the equivalent rUK code: the C prefix is for HMRC's administrative tracking. National Insurance is unaffected. The same residency tests apply as for Scotland — HMRC looks at your main home address, not your employer's location. 0T (zero-T) tells your employer to apply no personal allowance at all, but unlike BR it still steps you through the normal tax bands: 20% on the first £37,700 of taxable pay, 40% from £37,700 to £125,140, and 45% above that. Because the £12,570 personal allowance has been removed entirely, every pound of pay is taxable from the very first payslip. 0T is most often used as an emergency code when HMRC does not yet have enough information to issue a proper cumulative code — for example when a new starter cannot supply a P45 and does not complete a starter checklist, or when a leaver receives a final payment after their P45 has been issued. It is also commonly used for non-resident directors, lump-sum redundancy payments above the £30,000 exempt limit, and certain share-scheme payouts. Compared with BR (a flat 20% with no allowance), 0T is harsher for higher earners because it uses the higher- and additional-rate bands too. The good news is that 0T is almost always temporary: once HMRC reconciles your year-to-date pay, they will replace it with a cumulative code and refund any overpaid tax automatically through your next payslip.

Breakdown of the code

• C

  C

  Cymru / Welsh prefix — you are a Welsh taxpayer. The Senedd has not yet varied rates from rUK, so the code behaves the same in pence terms.

• 0

  Number

  Zero personal allowance.

• T

  Letter

  Items in your tax affairs require HMRC review — used here to mark a temporary zero-allowance state.

Worked example

New starter who lost their P45 on £30,000 (paid monthly).

£500/month income tax — roughly £2,514/year more than 1257L.

Who should be on C0T?

• Welsh residents whose main home address is in Wales
• New starters with no P45 who did not complete a starter checklist
• Final payments made after a P45 has been issued
• Non-resident directors and one-off share-scheme payouts
• Redundancy payments above the £30,000 exempt threshold

Common problems

• It feels punitive — you lose the allowance entirely until a cumulative code is reissued.
• High earners can be pushed into 40% or 45% per pay period without any smoothing.
• A delayed FPS submission keeps you on 0T longer than necessary.

What to do if C0T looks wrong

1. Provide your employer with a P45 from your previous job, or complete a starter checklist accurately (Statement A, B or C).
2. Wait one or two pay cycles — most emergency codes auto-correct as soon as HMRC receives the first FPS submission from your new employer.
3. If the code persists into a third payslip, sign in to your personal tax account and confirm both employments are listed correctly.
4. Phone HMRC on 0300 200 3300 quoting the date you started and the date your last job ended — they can issue a cumulative P9 the same day.
5. Once a cumulative code is reissued, any overpaid tax is refunded automatically through your next payslip.

If you should be on a different code…

Quick decision tree — when C0T is the wrong fit, here is the most likely correct code.

• If you have moved out of Wales — you should be on 0T.

  No personal allowance. All income taxed via the normal 20% / 40% / 45% bands.