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Why am I paying Emergency Tax?

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If you suddenly find yourself paying emergency tax, this is likely to be because HMRC doesn’t know enough about your income or tax details for the full tax year.

This usually happens if:

  • You have started a new job and haven’t got a P45 from your previous employer for the same tax year
  • You have started your first job since the beginning of the current tax year and haven’t been getting any taxable state benefits or company pension
  • You’ve started a new job but have been employed elsewhere, or received taxable state benefits during the year
  • You’ve started a new job and were previously self-employed
  • There has been a change in your tax code because you have started to receive company benefits – such as a company car – or you have started to get the state pension.

You will be given an emergency tax code

The emergency tax code is used until HMRC has enough information to work out the code you should be on. It is set every year and makes sure you get the basic personal allowance – the amount you can earn tax free – but doesn’t take into account any other allowances or reliefs you may be entitled to.

The emergency code for this year is the current personal allowance (£9,440) divided by 10, followed by the letter ‘L’ – so 944L.

You may also see the letters W1 or M1 at the end, meaning ‘Week 1’ or ‘Month 1’ whereby you get a proportion of the personal allowance over the remainder of the tax year.

It so happens that 944L is the tax code that most people get if they are entitled to just the basic personal allowance, but in their case it is not an emergency code and they will get the right amount of tax-free pay.

HMRC logo, emergency taxconfused about tax codes

If you are starting your first job in a tax year and haven’t been receiving any taxable pensions or state benefits then you will usually be put on a ‘cumulative’ emergency tax code.

This will give you your full tax-free personal allowance over the remainder of the tax year because your employer can carry over any tax-free allowance not used in the period before you started your job.

Your tax should then be about right by the end of the tax year.

You might be put on a week 1 or month 1 emergency tax code if you’ve had another job during the tax year. This will give you the remainder of your tax-free allowance spread over the rest of the year. It treats each week or month on its own and gives you an equal amount of tax-free pay every payday.

It can’t take into account changes that may have happened earlier in the year so your tax may not be exactly right at year end.

Make HMRC aware of any changes as soon as possible

As soon as HMRC has details of your previous income and tax paid for the year, they will send you and your employer the correct code and your employer will deduct the correct tax in future and refund any overpayments.

You should contact HMRC though if you think you have paid too much tax as a result of being on an emergency tax code.

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Comments

8 Responses to “Why am I paying Emergency Tax?”

  1. amelia dearlove

    i started a new job couple weeks ago and my first pay i was emergency taxed please help i should be on 1000L not BR

    Reply
  2. Christopher woodward

    I am paying emergency tax and my tax code is BR but I give my new employer my pet.
    Can you tell me when I will start paying normal tax and get my tax back.
    Many thanks

    Reply
  3. Michael

    Hi I’ve started a new job and I’m paying emergency tax how do I sort this out

    Reply
    • theworkingparent

      Your employer should be able to put you in the right tax bracket, speak to your HR department or manager and ask them to look into it. Alternatively, you could contact HMRC and they will be able to tell you what tax bracket you should be in.

      Reply
  4. Dgreg

    I just arrived to u.k in october 2015 . I started my first job from january 2016 . Will my first job in uk be tax free until i earn a certain amount or will i need to pay taxes like everyone else who has been working here from ages ? Please explain me in details .

    Reply
  5. Lloyd Mcintosh

    I’ve been paying emergency tax for the passed 4 weeks now how do i sort this out pls

    Reply
  6. bex

    You should contact the tax office. If you have had no taxable earnings, employment expenses or benefits provided by an employer in UK then you will go on 1100L cumulative. You would pay 20% taX on anything over (11000÷12) if youre paid monthly, and (11÷52) if youre paid weekly

    Reply

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