Emergency tax codes: why you're on one and how to get your money back
An emergency tax code is a temporary code your employer uses when HMRC doesn't yet have the full picture of your income. It can mean paying too much tax for a while, but the money usually comes back.
What does an emergency tax code look like?
Emergency codes end in W1, M1 or X, for example 1257L W1, 1257L M1 or 1257L X. W1 is used for weekly pay and M1 for monthly pay. These are known as non-cumulative codes: each payslip is taxed as if it's the only one you've had this year.
Why am I on an emergency tax code?
The most common reasons are starting a new job without giving your employer a P45, starting a second job, starting to get a company benefit or State Pension, or taking money out of a pension for the first time. In each case your employer or pension provider applies a stop-gap code until HMRC sends through the right one.
Will I pay more tax on an emergency code?
Often, yes. Because the code ignores what you've already earned this tax year, you might not get the full benefit of your Personal Allowance, or you could be taxed at a higher rate on a one-off payment. First pension withdrawals are a well-known example, where a large lump sum can be taxed as if you earn that much every month.
How to get off an emergency tax code
Give your new employer your P45 if you have one, or fill in the starter checklist they give you. You can also update your details in the HMRC app or your Personal Tax Account. HMRC will then send your employer a new code, and any overpaid tax is usually refunded automatically through your next payslips.
If you've left work or the year has ended, HMRC normally sends a P800 calculation and refunds the difference. For pension withdrawals you can reclaim straight away using the relevant HMRC form rather than waiting.