As a new arrival to the UK, or if you are embarking on your first job in the UK, there’s a high possibility that you might get put on an Emergency Tax Code by your employer. It’s not their fault, it’s the rules imposed by HMRC. What this will mean is the Emergency Tax Code will 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 Tax Refund if necessary.
Table of Contents
PAYE System
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 has any of the following prefix or suffix symbols W1, M1 or X, then you are on an emergency tax code. This means everything you earn will be taxed on an “emergency basis” meaning you won’t receive your entitlement to your yearly personal allowance Now that could mean a lot of money!
The good news is an Emergency Tax Code is usually 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. But this relies on HMRC updating the code in a reasonable time, but given the atrocious state affairs there at the moment, that won’t happen anytime soon!
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, so, hand on your P45 from a previous employer or complete a P46 if you don’t have that form. Your tax code will then 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 in place and this will then ensure your tax deductions have been adjusted accordingly. If it’s not the case and you’re still on an emergency code, then you can let us deal with all the stress and rigmarole and Apply here to get your tax back.
Photo by Vlada Karpovich from Pexels