Are you on an emergency tax code?
If your employer doesn’t know enough about your income or tax details then you may be put onto an ‘emergency tax code’. This ensures you pay some tax although it doesn’t take into account your specific tax reliefs and allowances.
But what is an emergency tax code? When might you end up on an emergency tax code? And how much is emergency tax in 2011? Keep reading to find out.
What is an emergency tax code?
You will be put on an emergency tax code by employer if HMRC does not have enough information about your income to enable them to send your employer (and you) your correct tax code.
An emergency tax code ensures that you receive the basic Personal Allowance (and therefore some tax-free pay) but it doesn’t take into account any other tax allowances or tax reliefs you may be entitled to.
When might I be put on an emergency tax code?
You might be put on an emergency tax code if:
- You were self employed and have now started a new job
- You have started a new job but you don’t have your P45 from your previous employer
- Your tax code has changed during the year (for example if you have stated to receive company benefits)
- You have started your first job since the start of the tax year
How much is emergency tax 2011/2012?
The emergency tax code is set each year and changes on an annual basis as the Personal Allowance changes. It is a number followed by the letter ‘L’.
The number represents the basic Personal Allowance divided by ten. In the 2011/12 tax year, the basic Personal Allowance is £7,475 and so the emergency code for 2011-12 is therefore 747L. This means that you can earn up to £7,475 in the current tax year before you start paying income tax.
Coincidentally, 747L is also the tax code for someone who is entitled to just the basic Personal Allowance in 2011/12. If your tax code is 747L it doesn’t automatically mean you are on an emergency tax code.
Getting the right tax code
It is advisable for you to provide any information requested by your employer or HMRC as soon as possible so you can get onto the correct tax code as quickly as you can. If you don’t you could end up paying too much or too little tax.
Once HMRC has details of your previous income and the tax you have paid for the tax year, they will send you and your employer your correct tax code. Your employer will deduct the correct tax in future and refund any overpaid tax.
If you have been on an emergency tax code you may well have paid too much tax. If you think you’ve paid too much tax you should claim a refund by contacting HM Revenue and Customs. You’ll need to provide them with your P60 form.