What is emergency tax?
If you start a new job and your employer does not know what tax code to put you on, then an emergency tax code may be issued.
Emergency Tax Codes
There are a number of emergency tax codes. You will be able to recognise if you are on such a code if on your pay slip your tax code has a suffix or prefix of BR, X, WK1 or MTH1.
When you commence employment for the first time, your employer should ask you to fill in a P46 form. Until your employer gets this form back you will be on an emergency tax code. The consequence of being on one of the emergency tax codes is that you will only be entitled to the basic personal allowance; it does not take into account any entitlement to other allowances or possible reliefs in your monthly pay cheque. If you are put on an emergency tax code it will be applied from the first week, meaning that earnings will be ignored from previous months and each pay period is looked at individually.
How much is Emergency Tax?
Until your employer receives your P46 form back they will be forced to keep you on an emergency tax code. Many people ask us ‘How much is Emergency Tax?’ It is tax at the full 22% basic rate, which will be deducted from your pay.
What do I need to do if emergency tax affects me?
If you are paying emergency tax or have done so anytime in the last 6 years and want to claim it back, you can apply online for your emergency tax refund.