What Is Emergency Tax?
Emergency tax is applied when your employer doesn't have enough information to assign you a standard tax code and is waiting for HMRC to notify them of the correct tax code for you.
Employers use tax codes to determine how much personal allowance to apply and which income tax rates should be deducted from your pay. An emergency tax code is a temporary measure used by your employer when they’re unsure whether you should receive any personal allowance on your payslip or if your basic rate tax band (20%) is being applied elsewhere.
Emergency tax codes help prevent situations where someone receives too much personal allowance or pays too little income tax, which could result in owing HMRC at the end of the tax year. However, in some cases, it can lead to overpayment of tax, as individuals may not benefit from their full personal allowance or lower tax rates, potentially entitling them to a tax refund.

Emergency Tax Codes
There are four main types of emergency tax codes, each affecting how your personal allowance and income tax are calculated:

• Basic Rate (BR): All income is taxed at the basic rate (20%) without any personal allowance.

• 0T: All income is taxed without any personal allowance.

• D0: All income is taxed at the higher rate (40%) without any personal allowance.

• W1/M1 or X: You receive the personal allowance for the week or month, but no backlog of personal allowance is applied.

You can find your tax code on your payslip. If you see one of the above codes, you’re likely paying emergency tax.

How Much Is Emergency Tax?
The amount of emergency tax you pay depends on your personal situation and the specific code you’ve been assigned.

Example:
If you’ve been placed on the emergency tax code BR in a new job during the 2023-24 tax year, and your gross pay is £2,000 per month, you would pay £400 in emergency tax instead of £190.50 because you’re not receiving any personal allowance.
If you were on the standard tax code, you’d receive a deduction for your personal allowance of £1,047.50 (12,570 ÷ 12) before paying tax, resulting in £190.50 in income tax.
Under the emergency tax code, you’ve overpaid by £209.50.
Emergency Tax BRStandard Tax 1257L
Gross Pay                                          £2,000.00
Personal Allowance                      £0.00
Taxable Pay                                      £2,000.00
Income Tax (20%)                           £400.00

What Does a W1/M1 Tax Code Mean?
If you’re on the W1/M1 (Week 1/Month 1) tax code, you’ll receive the personal allowance for the week or month that you work for your current employer, but you won’t receive any backlog of personal allowance owed to you, for instance, if you didn’t work in an earlier part of the tax year.

Example:
Suppose you start a new job in May 2023 and are placed on the emergency tax code 1257W1/M1. You had no earnings in April 2023, and your gross pay is £2,500 per month.
Because you’re on the W1/M1 tax code, you won’t receive your unused April 2023 personal allowance of £1,047.50 on your May 2023 payslip. If you were on a standard tax code, your employer would give you your unused April 2023 personal allowance before taxing you in May.
1257 W1/M1Standard Tax 1257L
Gross Pay£2,500.00
Personal Allowance – April 2023£0.00
Personal Allowance – May 2023(£1,047.50)
Taxable Pay£1,452.50
Income Tax (20%)£290.50

How to Get Off Emergency Tax
If you’re being taxed under an emergency code, talk to your employer to ensure they have all the correct information. Once they have it, they should be able to update your tax code on your next payslip.
If your employer can’t help, you should contact HMRC at 0300 200 3300 (have your National Insurance number ready). You can also use the HMRC online checker by logging into your personal tax account.

How to Get an Emergency Tax Refund
Once your tax code is updated, you should receive an emergency tax refund, typically through your payslip. Your employer will correct the tax code they used for your pay, recalculating and refunding you the difference by reducing the tax you owe in the month they make the correction.
If your employer isn’t able to help with your emergency tax refund, HMRC will assess your earnings and tax paid at the end of the tax year. If they find you’ve overpaid, they will issue a P800 letter detailing how much you’re owed.
If HMRC discovers that you’ve underpaid tax during the year, they will recalculate your tax and issue a P800 if you owe less than £3,000, or a simple assessment if you owe more than £3,000.

How to Avoid Emergency Tax
To avoid emergency tax, provide your new employer with your P45 as soon as possible. If you’ve lost your P45, contact HMRC to resolve the issue and ask them to send the correct tax code to your employer.
If you don’t have a P45, ensure your employer gives you a starter checklist to fill out and return in time for them to prepare your payslip.
Why Are You On An Emergency Tax Code?
You might be on an emergency tax code if you:

• Start a new job and haven’t provided a P45

• Begin working for an employer after stopping self-employment

• Have a second job

• Receive company benefits, like a company car

• Receive the State Pension