What is emergency tax and can I claim it back?

Sometimes, you might be paying too much tax because of a temporary tax code.

Let us talk about why this can happen.

We will also discuss how you can get back the extra money you paid.

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What is emergency tax, and how does it work?

Often, you might be given a temporary tax code if the tax office does not have your regular one. This means you could be paying more tax than necessary.

Remember, this is just for a short time, either until your usual tax code is sorted out or the tax year ends.

When you are on this emergency tax code, you do not get the usual amount of money that’s not taxed, so you end up paying more tax than you should.

If you see ‘W1’, ‘M1’, or ‘X’ on your payslip’s tax code, you are being taxed on an emergency basis.

Why am I on emergency tax?

You could be paying emergency tax for a few different reasons:

• You started a new job and the tax office did not get your pay details in time.
•  Your boss might have made a mistake with your tax number.
•  You switched from working for yourself to working for someone else.
•  You have more than one job at once.
•  You are a student who worked during school breaks.
•  You went from working full-time to part-time.
•  You get extra perks from your job or you are getting your retirement money from the government.

When might you get an emergency tax code on pension income?

You might have been charged too much tax on your pension for several reasons:

• The company managing your pension used the wrong tax number.
•  The money you earn before taxes has decreased.
•  The part of your state pension that affects your taxes was wrong.
•  You had more than one way of earning money, like another pension.
•  You were taxed too much on a big one-time payment from your pension.

What is a P800?

A P800 is a letter you get after the tax year ends, telling you if you have paid too much or too little tax.

It will let you know if you have to pay extra or if you can get some money back.

The letter will also give you a detailed explanation of how they worked out your taxes.

Most of the time, you do not need to call the tax office when you get a P800, only if you think they got the numbers wrong.

How can you claim back emergency tax?

There are a few ways to get back the extra tax you paid by mistake because of an emergency tax code.

If your P800 form says you should get your money back, the tax office will explain in the letter how they will return it to you.

Usually, they send it through a bank transfer, your tax account online, or a cheque.

Make sure the tax office’s numbers are right before you get your refund.

If they give you too much and you do not tell them, you might have to pay a fine and return the extra cash.

If you believe you have paid too much tax this year (2023/24) and have not gotten a P800, your tax code might be wrong.

To get your tax back, tell the tax office before the tax year ends. You can do this online or by phone.

The tax office’s phone number is on the GOV.UK website.

Have your personal info ready when you call, like:

• Your full name, home address, birthday, and National Insurance number
•  Details of your jobs or pensions
•  How much you think you made or got from your pension this year

If you are asking for a tax refund for a past year, it is best to write a letter to the tax office.

Write ‘repayment claim’ on your letter and use the address from GOV.UK.

Include all your personal details and, if you have them, copies of your P60s and P45s.

Tell them why you think they owe you money and how you’d like to get it.

How long does it take to get emergency tax back?

If the tax office agrees with your refund request, you will get your money back in about five days to two months.

How long it takes depends on if you are getting back money from a job or a pension, the way you asked for it, and if they need to do any extra checks.

How to avoid emergency tax

Sometimes, you cannot stop getting an emergency tax code.

However, you can lower the risk by telling the tax office quickly whenever your situation changes.

A tax pro can make sense of taxes for you and help with your money.

You can find a good financial advisor through Unbiased right now.

People May Ask

What is emergency tax?

Emergency tax is a higher tax rate that may be applied to your income when your employer or pension provider does not have the correct tax code for you. It is a temporary measure until the correct tax code can be determined.

Can I claim back emergency tax?

Yes, if you have paid emergency tax, you can claim it back. You’ll typically receive a P800 tax calculation from HMRC if you’ve overpaid, which will explain how to get a refund.

How do I know if I am on an emergency tax code?

Your tax code will have ‘W1’, ‘M1’, or ‘X’ at the end if you are on an emergency tax code. This indicates that your tax is being calculated on a week 1, month 1, or emergency basis.

What should I do if I am on an emergency tax code?

If you find yourself on an emergency tax code, you should contact HMRC with the correct information so they can update your tax code. You can also check your payslips and P60 to ensure your tax code is correct.

How long does it take to get a tax refund?

If you’re due a tax refund, it can take anywhere from five days to eight weeks after your claim is accepted by HMRC, depending on various factors like security checks and how you applied.

What can I do to avoid emergency tax?

To minimize the chances of being put on an emergency tax code, make sure to inform HMRC of any changes in your circumstances as soon as possible. Keeping your employment details up to date can help prevent incorrect tax codes.

Where can I find help with my taxes?

If you need help understanding your taxes or managing your finances, you can connect with a financial advisor. Websites like Unbiased can help you find a qualified professional.