If your tax code isn’t available, you may be issued emergency tax by HMRC. Emergency tax codes can be difficult to understand, especially if you haven’t been issued one before. To learn more about the emergency tax code and why you might receive one, continue reading our helpful guide.
The Emergency Tax Code
What is the emergency tax code? The emergency tax code is a type of code assigned when your actual tax code is unavailable. You’ll be issued an emergency tax code temporarily until HMRC finds the right tax code to put you on. Due to being issued a temporary tax code, you’ll likely receive no personal tax-free allowance. In turn, this results in paying more tax than you owe.
Why Are Emergency Tax Codes Issued?
There are several reasons why you’re issued emergency tax, such as:
- Starting a new job, and HMRC not receiving the correct income details
- Beginning work with an employer after being self-employed
- Receiving company benefits or the State Pension
If you’ve experienced any of these circumstances recently, we advise checking if HMRC have put you on an emergency tax code.
Have You Been Issued an Emergency Tax Code?
There are two main ways to know if you’ve been issued an emergency tax code:
- You’ve paid more tax than usual
- Your tax code on your payslip shows W1, M1, or X
If you notice that you’re on an emergency tax code, don’t panic! Although receiving an emergency tax code can be frustrating in some aspects and difficult to understand, HMRC will update your tax code once they receive the correct details or until you have paid the right amount of tax.
What to Do After Receiving an Emergency Tax Code
Have you received an emergency tax code? If so, there are a few ways to resolve the issue depending on your circumstances.
Started a New Job: What Next?
If you’ve recently started a new job, HMRC will require updated income information. Start by giving your new employer your P45 from your previous job. If you don’t have a P45, your employer should provide a form to fill out the necessary details regarding your past employment.
Begun Work With an Employer After Being Self-Employed: What Next?
The same process as starting a new job can be followed. Your new employer should provide a form to fill out the necessary details regarding your self-employment. A P45 won’t be needed, as self-employed individuals don’t require them.
Received Company Benefits or the State Pension: What Next?
Check your tax code is correct, making sure it includes either the company benefit or the State Pension. If they aren’t included, it means the information is incorrect. This’ll be why you’ve been issued an emergency tax code. Contact HMRC to update your details.
How Long Do Emergency Tax Codes Last?
As mentioned, emergency tax codes are temporary, and HMRC can successfully update your tax code to the right one when they’re provided with the correct details. This usually takes 35 days, but it can take longer if you owe them tax that’s yet to be paid.
Can You Claim Back Emergency Tax?
Yes, you can claim back emergency tax by following these simple steps:
- Use your P800 to find out whether you’re due a refund
- Contact HMRC to see if you’re able to claim tax back
- Wait for HMRC to send a letter confirming your claim
- If your claim is confirmed, wait for a bank transfer or cheque from HMRC
- Check that the refund is correct in line with your personal tax account records
Emergency tax refund claims can take up to 8 weeks to be received once accepted, depending on whether you’re reclaiming work-related earnings or earnings from your pension.
What is Required to Claim Back Emergency Tax?
Before approaching HMRC, it’s important to have key details to hand:
- Full name
- Address
- Date of birth
- National Insurance Number
- Employer
- Pension provider
- Estimate of your earnings
Without this information, you might not be able to receive a refund.
Tax Assistance When You Need it Most
There are minimal ways to avoid receiving an emergency tax code. However, keeping up to date with tax payments and notifying HMRC of changes in your circumstances helps lower the chances of receiving one. At LJS Accounting Services, we offer tailored tax services, helping clients complete tax returns and plan financial affairs accurately.
We support and advise clients, detailing how much tax they must pay and when. Allow our dedicated and friendly team of professionals to assist you today, helping reduce the chance of being issued an emergency tax code by HMRC.
Contact us to find out more about how we can help you.
Keli Evans, Director at LJS Accounting Services, excels in taxation and statutory accounts. With a focus on strong client relationships, she leads a diverse portfolio, overseeing vital financial aspects like VAT, payroll, pensions, and taxation with a holistic and committed approach.
