What is an emergency tax code?
An emergency tax code is used by your employer because your correct tax code is not available.
It’s only meant to be a temporary measure and only used until the tax office sends you and your employer the right tax code.
The use of an emergency code typically means you don’t receive any tax free personal allowance on the income that the tax code is used against.
You can find your tax code on a payslip or through using your personal tax account.
Checking your emergency tax code is correct is recommended because if it is not you will normally pay too much income tax.
We explain below how to check and change your emergency tax code.
Why do I have an emergency tax code?
One of the most common reasons is that you’ve started a new job and can’t provide your P45 from your previous employer.
Other reasons why you have an emergency tax code include:
- You’ve changed jobs.
- You are receiving additional income for example from a pension.
- You are getting company benefits like a company car.
- You are starting PAYE employment after being self employed.
What is the emergency tax code?
An emergency tax code can be written in different ways using the letters and numbers M1, W1 and X.
Emergency tax code examples:
- 1234 M1
- 1234 W1
- 1234L X
On some occasions a BR or OT tax code can be used. The BR and OT tax codes are not necessarily incorrect and used as emergency tax codes.
In cases where you have more than one form of PAYE income for example the BR or OT tax code should be used to make sure you don’t over or underpay income tax.
How do I change my emergency tax code?
The way to change an emergency tax code depends on your circumstances. The important bit is to check it and act as quickly as you can to avoid paying more income tax than you need to.
Emergency tax because you have started a new job:
If you started a new employer your emergency code should change when you provide your new employer with your P45 (from your last job) or after a starter checklist has been completed.
After the P45 or starter checklist has been processed the tax office will send you and your employer a new tax code.
When your new tax code has been issued your employer can then start using it and this should mean you will start paying the right amount of tax and receive a refund of the emergency tax previously paid.
You shouldn’t need to contact HMRC if the P45 or starter checklist process works correctly.
Emergency tax code for other reasons:
If you have an emergency tax code for a reason other than starting a new job you will need to check your tax code with HMRC.
This will allow HMRC to explain to you why an emergency code is being used against some or all of your PAYE income.
The tax code system isn’t perfect and emergency codes can be used incorrectly. Contacting HMRC will give them the opportunity to update your tax code where necessary.
Emergency tax code tax rebate
Sometimes you can pay too much tax when you have had an emergency tax code. If your tax code is changed during a tax year any tax you have overpaid is normally paid back to you in that tax year through your salary.
If you have had an emergency tax code in previous tax years, and you have not been refunded you should contact HMRC so they can check your tax record.
When HMRC have reviewed the years any tax rebate should be automatically repaid to you via cheque or BACS through your online tax account.
A P800 tax calculation should be sent to you through the post to explain how HMRC have deducted too much tax because of your emergency code. You should check the figures on your P800 against your own records to ensure accuracy.
