Tax Rebates & Refunds

How to spot an emergency tax code

November 19, 2012
Posted in Income Tax — Written by Chris

One of the most common reasons why people claim tax rebates is because they have been mistakenly put on an emergency tax code, leading to a far higher rate of income tax being paid than is actually owed.

The good news is that emergency tax codes are relatively easy to spot, as they tend to look the same. Check your payslip or annual P60 form and find your tax code. Does it contain any of the following prefixes of suffixes?

• X
• WK1
• BR
• MTH1
• L

If it does, you will need to speak to your employer or contact HM Revenue & Customs (HMRC) to arrange for you to be put on the correct tax code to suit your circumstances. It is important to do this as soon as you notice a problem with the tax you pay, as emergency tax codes can result in you paying a rate as high as 22% on your earnings.

Once your tax code has been sorted out, the next step is claiming a tax refund for all the extra tax you paid whilst on an emergency code. HMRC may send you this automatically, or you may need to file a tax rebate claim yourself.

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