As a working holiday maker in the UK there’s a high possibility that you might get put on an Emergency Tax Code. This may result in you being over taxed, so here’s some tips on what to do if you think you’ve being overtaxed and how you can apply for a PAYE Tax Refund if necessary.
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Under the PAYE system the amount of tax that will be deducted from your income will depend on your tax code. If your tax code is any of the following: 1100 LW 1 1100 M1 or 1100L X, then you are on an emergency tax code. This means everything you earn above the personal allowance of £11,500 for the 2017 to 2018 tax year will be taxed. Now that could mean a lot of money.
The good news is an emergency tax code is temporary, especially if you just started on a new job, have recently switched from being self-employed to employed, or you’re getting company benefits or the State Pension. Once your tax code is updated, you will be taxed accordingly.
What to do if you’re on emergency tax
If you’re put on an emergency tax code, make sure you give your new employer the details of your income or pension from previous sources. Submit a P45 form or a new starter checklist, if you don’t have the form.
Your tax code will be updated automatically. You will receive a PAYE Coding Notice about the update, and HM Revenue and Customs (HMRC) will inform your employer or pension provider about your updated code.
Be sure to check your next payslip and see that your new tax code is indicated, and your tax deductions have been adjusted accordingly. If it’s not the case, contact HMRC right away to avoid overpaying tax. While overpayment can mean a bigger tax refund, cash on hand will be limited.
Think you may be due a tax refund? Apply here to get your tax back.