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Tax - Emergency Tax Codes

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What is an Emergency Tax Code?

An Emergency Tax Code is used to deduct 20% tax from all of the PAYE income received.  This means that no tax free allowance is available, and all income received will be taxed at basic rate ( BR ) which is at 20%. Sometimes an emergency tax code is correct, but in many cases it can mean that you will pay too much tax.

To find out more about Emergency Tax Codes please follow the links below:

* What does an emergency Tax Code look like?

* Why do I have a BR/ Emergency Tax Code?

* Can I get a Tax Refund if I have paid Emergency Tax?

What does an emergency Tax Code look like?

There are several different Emergency Tax Codes. The most usual is the BR tax code which means that you are paying tax on all your income at the basic rate. Other Emergency Tax Codes include ‘week 1’ or ‘month 1’ tax codes which have a WK1 or MTH1 prefix stated after the tax code for example 123WK1.

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Why do I have a BR/ Emergency Tax Code?

There are many reasons that why you may be given an Emergency Tax Code.

The most common reasons for having an emergency Tax Code are ...

  1. Your employer does not have the correct information about how much tax from your earnings should be paid to HMRC, so they are instructed to deduct tax at the higher rate
  2. You have more than one job
  3. You have been receiving state benefits
  4. You start receiving a pension
  5. You have previously been self-employed

Important to know ...

If you have started a new job and your employer has not received your P45 from your previous job they will not be able to give you the correct tax code, because they do not know how much tax you have already paid in that tax year. It is therefore important to make sure that you keep your P45 from your last job to give to your new employer.

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Can I get a Tax Refund if I have paid Emergency Tax?

If you have been on an Emergency Tax Code and paid too much tax, in almost every case you will be entitled to a Tax Refund. In some cases this will be made automatically by HMRC at the end of the tax year, or they will instruct your employer to reduce the tax deducted from your earnings through a new tax code. However, if they do not receive the correct information from you and/or your employers, they may not be able to do this.

For More Information See ...

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