Emergency Tax Explained: What It Is & How to Claim a Refund
Ever looked at your payslip after starting a new job or a change in circumstances and thought, "Why is my tax so high?" or noticed an unfamiliar tax code? You might have encountered emergency tax. It can be a bit worrying to see more tax deducted than you expected, but in most cases, it's a temporary situation, and any overpayment can usually be reclaimed.
This article will demystify emergency tax for UK taxpayers in 2025. We'll explain what it is, why it happens, how to spot if you're on an emergency tax code, and most importantly, the steps you can take to claim back any money you've overpaid.
What Exactly is Emergency Tax?
In simple terms, emergency tax is a way HM Revenue & Customs (HMRC) ensures that individuals pay some income tax even when HMRC doesn't have all the necessary details to assign the correct tax code straight away.
Think of it as a temporary, "best guess" tax code applied to your earnings. It usually means your tax is calculated based only on what you earn in that specific pay period (week or month), without taking into full account your annual tax-free Personal Allowance from the start of the tax year. This often results in a higher tax deduction initially.
The good news is that emergency tax codes are not designed to be permanent. Once HMRC receives the correct information about your income and circumstances, your tax code should be updated, and any overpaid tax is usually refunded.
Common Reasons You Might Be on an Emergency Tax Code
Several common situations can lead to you being placed on an emergency tax code:
Starting a new job: This is the most frequent reason.
If you don't provide your new employer with a P45 form from your previous job.
If there's a delay in your new employer processing your P45.
If you're starting your very first job and don't have a P45.
Having a second job: If you have more than one job, HMRC might put your second job on an emergency (or basic rate) tax code to ensure enough tax is collected, as your Personal Allowance is typically allocated to your main job.
Receiving company benefits or the State Pension for the first time: If these start part-way through a tax year alongside your employment income, your code might temporarily change.
Significant changes in income: A large pay rise or bonus might trigger a temporary code adjustment.
Incomplete information: If you complete a "starter checklist" (the form used if you don't have a P45) but some details are missing or unclear.
HMRC doesn't have up-to-date information: If your circumstances have changed and HMRC hasn't been notified or hasn't processed the update yet.
How to Identify an Emergency Tax Code on Your Payslip
The quickest way to see if you're on emergency tax is to check the tax code shown on your payslip. Common emergency tax codes in the UK (for the 2025/2026 tax year, the standard Personal Allowance is £12,570, so the standard code is 1257L) include:
1257L W1: The '1257L' indicates your tax-free Personal Allowance, but the 'W1' (week 1) suffix means your tax is calculated on a non-cumulative basis, only for that specific pay week.
1257L M1: Similar to W1, but the 'M1' (month 1) suffix means your tax is calculated non-cumulatively for that specific pay month.
BR (Basic Rate): This code means all your income from this source will be taxed at the basic rate of income tax (currently 20%), with no Personal Allowance applied. This is common for second jobs or if your Personal Allowance is used up elsewhere.
0T (Zero T, No Thresholds): Similar to BR, but it means you get no Personal Allowance, and your income is taxed at all applicable rates (basic, higher, additional) as if you have no tax-free amount. This can result in a significant tax deduction.
Scottish Tax Codes (e.g., S1257L W1/M1, SBR, S0T): If you're a Scottish taxpayer, your code will start with an 'S'. The emergency principles (W1/M1 suffixes) still apply.
Welsh Tax Codes (e.g., C1257L W1/M1, CBR, C0T): If you're a Welsh taxpayer, your code will start with a 'C', and again, W1/M1 suffixes indicate an emergency basis.
The key feature of W1/M1 codes is that they don't consider your year-to-date earnings or tax paid. Instead, you get 1/52nd or 1/12th of your annual Personal Allowance for that pay period, regardless of what happened earlier in the tax year. This usually leads to an overpayment if you've had unused allowance from previous pay periods in that tax year.
Is Being on Emergency Tax a Problem?
While it can be a shock to see a higher tax deduction, being on an emergency tax code isn't necessarily a "problem" in the long run. It's a standard HMRC mechanism to ensure tax is collected while your correct details are being sorted out.
The main consequence is that you will likely overpay income tax in the short term, especially if you're on a W1/M1 code and should be on a cumulative one. Your Personal Allowance isn't being fully utilised against your income from the start of the tax year.
Less commonly, certain emergency codes like BR or 0T (if applied incorrectly as a main job code without any allowances due) could lead to an underpayment if you actually had allowances available that weren't factored in. However, the most common outcome of typical emergency codes (like 1257 W1/M1) is an initial overpayment.
Claiming Back Overpaid Emergency Tax: Your Step-by-Step Guide
The good news is that any overpaid emergency tax is usually reclaimable. Here’s how it generally works:
During the Current Tax Year (Automatic Correction is Common):
Provide Correct Information: The first step is to ensure your employer (and therefore HMRC) has your correct details.
If you have a P45 from your previous employer, give this to your new employer as soon as possible.
If you don't have a P45, you'll need to fill out a "Starter Checklist" (previously known as a P46). Complete this accurately.
HMRC Updates Your Code: Once your employer submits your details to HMRC (usually with your first payroll run), HMRC should process this information and issue a new, correct tax code to your employer.
Automatic Rebate Through Payroll: Your employer will then apply this new code. If you've overpaid tax in previous pay periods within the current tax year, the payroll system will often automatically calculate and refund the overpaid amount directly in your next available wage payment. You'll see this as a tax rebate on your payslip. This is the most common and easiest way to get your money back.
After the Tax Year Ends (from April 6th onwards):
HMRC Annual Reconciliation: After the tax year finishes on April 5th, HMRC automatically reviews the tax and National Insurance records of most PAYE (Pay As You Earn) taxpayers. This is called a reconciliation.
P800 Tax Calculation: If this review shows you've overpaid (or underpaid) tax, HMRC will usually send you a P800 tax calculation letter. This will explain how much you've overpaid and how you'll get your refund. Refunds are often issued by cheque or directly to your bank account if you've provided details to HMRC previously.
Claiming Online: If your P800 shows you're due a refund, you can often claim it online via your Government Gateway/Personal Tax Account. This is usually the fastest way to get it.
Contacting HMRC: If the tax year has ended, you believe you've overpaid, but you haven't received a P800 by autumn, you can contact HMRC directly. You can do this by phone or through your Personal Tax Account on the GOV.UK website.
Key Actions:
Always give your new employer your P45 if you have one.
If not, complete the Starter Checklist carefully.
Check your payslips and tax codes regularly.
Sign up for a Personal Tax Account on GOV.UK – it’s the easiest way to manage your tax affairs, see your tax code, and update your details.
How Long Will It Take to Get My Emergency Tax Refund?
The timeframe for receiving an emergency tax refund can vary:
Automatic Rebate via Payroll (Mid-Year): If your tax code is corrected during the tax year and your employer processes it, you could receive your refund in your next payslip or the one after. This is often the quickest way.
P800 Refund (After Year-End): If you're waiting for an end-of-year P800 tax calculation, these are typically sent out between June and October after the tax year ends. Once you receive the P800 and claim your refund online (if required), the payment usually arrives within 5-14 working days, though it can sometimes take longer. Cheques will take longer to arrive and clear.
Contacting HMRC Directly: If you proactively contact HMRC about an overpayment after the tax year has ended, the time can vary depending on their workload and the complexity of your case.
Proactive Steps: How to Help Avoid Emergency Tax
While you can't always avoid emergency tax (especially when starting a new job without a P45 immediately available), you can take steps to minimise the chances or duration:
Pass on your P45 promptly: When you leave a job, your old employer must give you a P45. Give this to your new employer on your first day or as soon as possible.
Complete the Starter Checklist accurately: If you don't have a P45, take care when filling out the Starter Checklist for your new employer. Ensure you tick the statement that best describes your circumstances to help them allocate the most appropriate initial tax code.
Keep HMRC informed of changes: If your circumstances change (e.g., you start or stop a second job, receive new taxable benefits), update HMRC. The easiest way is often through your Personal Tax Account.
Check your tax code regularly: You can see your current tax code on your Personal Tax Account. If it looks wrong or you don't understand it, query it with HMRC.
Register for your Personal Tax Account: This free online service at GOV.UK allows you to see your tax code, update your details, estimate your tax, and claim refunds.
What if Emergency Tax Leads to an Underpayment?
Although less common with typical emergency W1/M1 codes (which usually cause overpayments), it's important to be aware that if an incorrect code (like BR or 0T) is used for too long when you actually have allowances available, or if your circumstances are complex with multiple income sources, an underpayment could theoretically occur.
If HMRC's end-of-year reconciliation (P800) shows you've underpaid tax, they will explain why and outline how you can repay it – often by adjusting your tax code for the following year to collect it gradually, or by direct payment for larger amounts.
Key Takeaways: Understanding Your Tax
Emergency tax is a temporary measure used by HMRC when they don't have your full, correct tax details.
Common emergency codes include suffixes like W1 (week 1) or M1 (month 1) added to a standard code (e.g., 1257L W1/M1), or codes like BR and 0T.
It usually leads to an overpayment of tax initially.
Overpaid emergency tax is reclaimable, often automatically through your payroll once your code is corrected, or via a P800 form after the tax year ends.
Being proactive with your P45, Starter Checklist, and checking your Personal Tax Account can help minimise issues.
Where to Get More Help
If you're unsure about your tax code, believe you've overpaid or underpaid tax, or have questions about emergency tax:
Check your Personal Tax Account: Login or register on the GOV.UK website.
Visit the GOV.UK website: It has extensive information on income tax, tax codes, and claiming refunds.
Contact HMRC directly: You can find their contact details on GOV.UK.
Book a call with a tax or financial adviser today.
Take the first step toward financial clarity—speak with an adviser now.
Disclaimer: This article provides general information about emergency tax in the UK for the 2025/2026 tax year and is based on information available up to May 2025. Tax laws and HMRC procedures can change. It does not constitute financial or tax advice. If you are unsure about your specific tax situation, you should consult with a qualified tax advisor or contact HMRC directly.