Emergency Tax Code: What It Means and How to Get a Refund

Starting a new job and seeing a huge chunk of your first payslip disappear to tax is a horrible feeling. If it seems like far too much has been deducted, the chances are you have been put on an emergency tax code. This is one of the most common reasons people overpay tax in the UK, and the good news is that you can get the money back.

What Is an Emergency Tax Code?

An emergency tax code is a temporary tax code that HMRC assigns when they do not have enough information about your income to give you the correct code. This typically happens when you start a new job and your new employer has not received your P45 from your previous employer, or HMRC has not yet updated their records.

The problem is that emergency tax codes often result in you paying significantly more tax than you should, because they do not account for your full Personal Allowance on a cumulative basis.

Which Tax Codes Are Emergency Codes?

The most common emergency tax codes you will see on your payslip are:

• **1257L W1** or **1257L M1** - The standard allowance applied on a week-by-week (W1) or month-by-month (M1) basis instead of cumulatively. This means each pay period is treated in isolation, so you lose the benefit of any unused allowance from earlier months.
• **0T W1** or **0T M1** - No Personal Allowance at all, applied non-cumulatively. This is the worst one because you pay tax on every penny you earn.
• **BR** - All income taxed at the basic rate of 20% with no Personal Allowance. Common if you have a second job but sometimes applied incorrectly to your main job.
• **0T** on a cumulative basis - No Personal Allowance, but at least it is cumulative so adjustments happen over time.

The W1 and M1 suffixes are the telltale signs of an emergency code. If you see these on your payslip, you are almost certainly overpaying.

Why Does It Matter?

Under normal PAYE, your tax is calculated cumulatively. So if you earn nothing in April and May but start a job in June, the tax calculation in June takes into account the fact that you have already used up zero of your Personal Allowance. You effectively get a bigger tax-free chunk in June to catch up.

With an emergency code marked W1 or M1, each pay period is treated as if it is the only one that matters. Your annual Personal Allowance of 12,570 pounds is simply divided by 12 months (or 52 weeks), and that fraction is applied each period. If you started mid-year, you lose the benefit of the unused allowance from the months you were not working.

How Much Could You Be Owed?

If you started a new job partway through the tax year and were on an emergency code for several months, you could easily be owed several hundred pounds. In more extreme cases, particularly with the 0T code, refunds of 1,000 pounds or more are not unusual.

You can check exactly how much you might be owed using a free tool like AuditMyTax. Upload your payslip or P60 and it will calculate the difference between what you paid and what you should have paid based on your actual circumstances.

How to Fix Your Tax Code

**Step 1: Tell your employer.** Give your new employer your P45 from your previous job. If you do not have a P45, ask your employer to send HMRC a starter checklist (formerly the P46). This should prompt HMRC to issue the correct tax code.

**Step 2: Contact HMRC directly.** Call 0300 200 3300 or use your Personal Tax Account online. Tell them your current tax code is an emergency code and provide details of your employment. They will update your code, and your employer will receive notification to adjust future deductions.

**Step 3: Wait for the correction or claim a refund.** Once your correct code is applied on a cumulative basis, your employer should automatically refund the overpaid tax through your next few payslips. If the tax year has already ended, you will need to claim the refund directly from HMRC.

Claiming a Refund After the Tax Year Ends

If the tax year has already finished and you were on an emergency code, HMRC may send you a P800 tax calculation showing the overpayment. This usually arrives between June and October. However, you do not have to wait. You can proactively contact HMRC or submit a claim in writing.

Remember, you have a 4-year window to claim refunds for previous tax years. So even if you were emergency-taxed in 2022/23, you can still claim that money back in 2026.

How to Avoid Emergency Tax in Future

• Keep your P45 safe and give it to your new employer as soon as possible
• Check your first payslip at any new job and verify the tax code
• Register for a Personal Tax Account at gov.uk so you can monitor your tax code in real time
• If something looks wrong, act immediately rather than waiting for HMRC to catch it

Emergency tax is frustrating, but it is fixable. The key is to check your payslip, spot the problem early, and take action. If you have already overpaid, tools like AuditMyTax make it simple to calculate exactly what you are owed and guide you through the claim process.