What is an emergency tax code?
Definition of emergency tax code
Being assigned to an emergency tax code sometimes results in the employee having to pay a higher rate of tax than they might otherwise have to pay.
Frequently Asked Questions
Why might HMRC assign an employee to an emergency tax code?
- starts a new job
- returns to paid employment after being self-employed
- starts receiving company benefits or the State Pension
How long does an emergency tax code stay in place?
How can I find out if I’m on an emergency tax code?
HMRC assigns employees to an emergency tax code when it doesn’t know enough about them to apply the correct tax code. This happens most commonly when an employee:
Emergency tax is usually a temporary measure. HMRC will automatically correct an employee’s tax code after it receives the information it requires. This usually happens when the new employer sends the employee’s P45 to HMRC.
If an employee is overcharged any tax as a result of being placed on an emergency tax code, HMRC usually provides a rebate for the overcharged amount. If you’re an employee and believe you’re being charged the wrong amount of tax, you should speak to your employer or contact HMRC to resolve the situation.
You’ll be able to see if you’re on an emergency tax code by looking at your most recent payslip. You can find more information about which emergency tax codes to look out for on HMRC’s website.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.