Tax Rebates & Refunds

A guide to PAYE and emergency tax codes

July 13, 2010
Posted in Tax Rebates — Written by Jennifer

If you have your tax deducted from your earnings through the PAYE (pay as you earn) system, your employer will provide you with a P60 every year. This is an important document that outlines your earnings and the amount of tax deducted every year from your income.

Similarly, if you have more than one source of employment, you will get a P60 from each of your employers. You should always check your P60 thoroughly to ensure that you are on the right tax code and an appropriate amount of tax has been deducted from your earnings.

What are emergency tax codes?

If your employer has not been informed about your tax code by the HMRC, they may put you on an emergency code. When you are on an emergency code, you may need to pay more tax than what you are supposed to. If your pay slip contains a prefix or suffix such as X, MTH1, WK1 or BR, it means you are on an emergency tax code.

Reasons why you may be put on an emergency code:

1. You started a new job, but did not receive a P45 from your previous employer
2. You started your first job after the commencement of the tax year
3. If you have not received a company pension, state pension or taxable state benefits
4. You started a new job while having other jobs (s)
5. Your tax code changed during the tax year

If any of the above conditions are true, your may have paid too much tax. In cases like this you can opt to seek help from professional tax experts to file for a tax rebate.

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