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What is an emergency tax code?

Published 12 January 2017 by

The tax code on your payslip just means the amount of Income Tax you pay every month. Don’t worry, your employer takes this off for you – you won’t have to worry about paying it yourself unless you’re self-employed.

But what does it mean if you see an emergency tax code on your payslip? Is this something to worry about and is there anything you should do about it? We’ll take you through what an emergency tax code means for you and how you can make sure you’re paying the right amount of income tax.

Why do you get an emergency tax code?

Your employer puts you on an emergency tax code when they’re not sure what tax code to put you on. This can happen if you start a new job or if you start working for someone after you’ve been self-employed. You might also get an emergency tax code if you get company benefits or the State Pension.

An emergency tax code means you get the standard tax-free allowance for the year and you’ll pay Income Tax after this. This is correct for most employees but if you were out of work for any time before you got your current job, you might be paying too much Income Tax.

Emergency tax code for 2016/17

The emergency tax codes for the 2016/17 tax year are 1100L W1, 1100L M1 and 1100L X. This isn’t the same as having an 1100L tax code though – this just means your tax-free Personal Allowance is £11,000. This is the case for most employees in the UK.

This tax code will only apply for the 2016/17 tax year. If you change jobs after April 2017 and you get an emergency tax code on your payslip, this will be a different code.

What can you do about it?

If you’re on an emergency tax code, don’t panic. Despite its name, it’s not actually an emergency.

You should only stay on an emergency tax code until your employer updates this with your correct Income Tax information. They should get this from your P45 and you should have one from when you left your previous job. If you don’t have one, you might have to fill in a new starter form and your employer will get your Income Tax information from here.

When you’ve done this, HM Revenue and Customs (HMRC) should update your tax code. But if you’ve been at a job for more than three months, get in touch with HMRC to tell them you’re on the wrong tax code and they should correct this for you. And if your emergency tax code means you’ve paid too much tax, you can claim a tax rebate.

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