Emergency Tax Codes Explained.
If your tax code has changed to an emergency code, you are almost certainly paying too much tax. Here is what it means and how to fix it immediately.
What is an emergency tax code?
An emergency tax code is a temporary code applied by your employer when they don't have your full income details for the tax year (usually because you started a new job without a P45). It means HMRC is taxing you on a 'worst-case scenario' basis until they receive your correct details.
Common Emergency Codes
- BR (Basic Rate)
You get no personal tax-free allowance. Every single pound you earn is taxed at 20%. This is devastating to your take-home pay. It is only correct if this is a second job. - 0T
Similar to BR, you get no personal allowance. However, you pay 20% on the basic rate band, and if you earn enough, you will pay 40% and 45% on the rest. - 1257L W1 or 1257L M1
You get your personal allowance, but it is applied on a "non-cumulative" basis. This means HMRC looks at your pay week-by-week or month-by-month in isolation, ignoring what you earned earlier in the year. If your pay fluctuates, you will overpay tax.
How to fix an emergency tax code
Your employer cannot fix this themselves. They are legally required to use the emergency code until HMRC tells them otherwise. You must intervene:
- Give your employer your P45: If you have a P45 from your previous job, give it to your HR/payroll team immediately.
- Log into your Personal Tax Account: Go to gov.uk/personal-tax-account. You can view your current employment, update your estimated pay, and trigger HMRC to send a new tax code to your employer.
- Call HMRC: If you can't get online, call HMRC on 0300 200 3300. Have your National Insurance number and your employer's PAYE reference number ready (you can find this on your payslip).
How do I get my refund?
If you have overpaid tax because of an emergency code, you will get the money back. The way you get it depends on when the code is fixed:
- Fixed during the same tax year: Your employer will receive a new 'cumulative' tax code. On your next payslip, the payroll software will recalculate your tax for the whole year, and your refund will be automatically added to your pay.
- Fixed after April 5th (end of tax year): HMRC will calculate your tax for the year just ended. If you overpaid, they will send you a P800 letter in the post (usually between June and October) and you will receive a refund via cheque or bank transfer.