What to Do if You've Been Emergency Taxed

Emergency tax can come as an unpleasant surprise when you open your payslip.

Find out why it happens and what to do if you experience it.

What emergency tax is and why it happens

Her Majesty’s Revenue and Customs (HMRC) is the organisation responsible for collecting tax from your earnings. To do this, they assign employees a tax code that lets the employer know how much tax that person needs to pay from their wages.

In some cases, HMRC doesn’t have enough information to apply the correct code and instead issues an emergency tax code. This is a temporary measure to make sure you still pay tax until they get the information needed to apply the correct code.

This can happen in certain circumstances, such as when:

  • You start a new job,
  • you start work for an employer after being self-employed,
  • you start or stop getting benefits from your job,
  • you receive taxable state benefits, or
  • you claim marriage allowance or expenses that you get tax relief on.

You may be charged at the basic rate of 20% or a higher rate of 40% on your full wage. Or, you may be taxed only on your pay that exceeds your personal allowance. A personal allowance is an amount of money you can earn before you pay tax on your wage.

How to know if you’ve been emergency taxed

Emergency tax is often much higher than what you should be paying, so you may notice as soon as you get your pay that it is less than you were expecting.

Check your payslip to see what tax code you are on. This will be somewhere on the payslip, often in the top right-hand corner. If you’re on an emergency tax code, your payslip will likely show one of the following:

  • 1257 W1
  • 1257 M1
  • 1257 X
  • BR
  • OT

What to do if you get emergency taxed

Your employer can help you update your tax code by sending details about your previous income or pension to HMRC.

If you’ve started a new job

Give your employer your P45 from your previous job. If you do not have a P45, your employer should ask you for the information they need instead.

If you’ve started working for an employer after being self-employed

Your employer should give you a ‘starter checklist’ – this is a form you can use to give them details about your previous employment.

If you’ve started getting company benefits or the State Pension

Check your tax code online to make sure it includes the State Pension or company benefit. If they’re not included, update your details in the tax code online service or by contacting HMRC.

The emergency tax code will stay in place until the end of the tax year or until your employer receives the correct tax code. 

If you think your tax code is wrong you can use HMRC’s online Income Tax checker, or call 0300 200 3300.

What happens if you pay too much tax

If you’ve paid too much tax, HMRC will send you a tax rebate when your tax code is corrected.

Get more information about budgeting, saving and money management on our Money & Me page.

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