Tax Rebates & Refunds

Tax rebates due to emergency tax coding

July 22, 2010
Posted in Tax Rebates — Written by Geoffrey

After you start a new job, your employer may not have your previous P45. In such cases, they will not be aware of which tax code to put you on. Thus by default you will be put on an emergency tax code.

There is a range of emergency tax codes issued and you must be able to recognise whether you are on such a code. The simplest way to determine your tax code is to check your wage slip. If you are put on an emergency tax code, your wage slip will indicate a prefix or suffix like BR, X, WK1 or MTH1.

Why are you put on an emergency tax code?

On the first day of your job, your employer will ask you to fill in a P46 form. Until the time you fill in this form and return it to your employer who will pass it on to the HMRC, you will be by default put on an emergency tax code. If you are on an emergency tax code you will not be allowed your basic personal allowance.

The emergency tax code does not even consider any entitlement or allowances in your monthly pay. This means that while you are on an emergency tax code you will be paying an excessive amount of tax. The emergency tax is charged at the complete 22% basic rate. This will be deducted from your wages in each month’s salary until you are put on an appropriate tax code.

If you have been put on an emergency tax code, you can apply for a tax refund from the HMRC.

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