Emergency Tax Codes UK: Why You Pay More and How to Fix It

If you have just started a new job and your first payslip shows more tax than you expected, you may be on an emergency tax code. This is a temporary measure HMRC uses when your employer does not yet have the information needed to apply your correct code. It is not a penalty, but it can mean you overpay tax until the situation is resolved.

What is an emergency tax code?

An emergency tax code is a default code your employer uses when HMRC has not yet confirmed your correct tax code. The most common emergency codes are:

• 1257L W1 (weekly paid) or 1257L M1 (monthly paid): gives you the standard Personal Allowance but calculates tax on a non-cumulative basis
• BR: taxes all your pay at the basic rate of 20% with no Personal Allowance
• 0T: taxes all your pay with no Personal Allowance, using all applicable rate bands

The W1 or M1 suffix is the key indicator. It stands for "week 1" or "month 1" and means your employer treats each pay period in isolation rather than calculating tax cumulatively from 6 April.

Why emergency codes lead to overpayment

Under normal cumulative tax, your employer tracks your total pay and total allowance from the start of the tax year. If you start a new job in September, the cumulative method accounts for the fact that you may not have used your full allowance in the earlier months.

With a W1/M1 code, that catch-up does not happen. Each month is treated as if it were the first month of the year. You receive one-twelfth of the Personal Allowance (£1,047.50 per month), but any unused allowance from earlier months is ignored.

Worked example

Suppose you start a new job in month 6 (September) on £3,000 per month. On a cumulative 1257L code, your employer would account for 6 months of unused allowance (£6,285). On an emergency 1257L M1 code:

1. Monthly allowance: £1,047.50
2. Taxable pay: £3,000 - £1,047.50 = £1,952.50
3. Tax at 20%: £1,952.50 x 0.20 = £390.50

Under the cumulative method, the tax for that month would be lower because the unused allowance from months 1 to 5 would be factored in. The difference is refunded once your correct code is applied.

Common reasons you end up on emergency tax

1. You started a new job and did not give your employer a P45 from your previous role
2. You started your first ever job and HMRC has not yet set up your tax record
3. You returned to work after a gap in employment
4. Your employer started you on the payroll before receiving your tax code from HMRC
5. You have come to the UK from abroad and do not yet have a tax coding notice

In most cases, the situation resolves itself within one or two pay periods once HMRC processes your details. Providing your P45 to your new employer as soon as possible is the single most effective way to avoid emergency tax.

How to get your code corrected

If you are on an emergency code and want to speed up the correction:

• Give your employer your P45 from your previous job. This contains your tax code and year-to-date figures, allowing your new employer to apply the correct code immediately.
• Complete a starter checklist (formerly P46) if you do not have a P45. Your employer should provide this form.
• Contact HMRC on 0300 200 3300 or use your Personal Tax Account online to check and update your tax code.

Once your correct code is issued, your employer will recalculate your tax from the start of the tax year and refund any overpayment through your pay.

Claiming a refund if the tax year has ended

If you were on an emergency code and the tax year ended before it was corrected, you may need to claim a refund directly from HMRC. You can do this by:

1. Checking your Personal Tax Account on gov.uk for an automatic calculation
2. Writing to HMRC with your P60 and details of the overpayment
3. Calling the Income Tax helpline on 0300 200 3300

HMRC will review your total income and tax paid for the year and issue a refund if you overpaid. This typically takes four to six weeks. You can verify whether your deductions look correct by running your figures through our payslip checker.

Frequently Asked Questions

How do I know if I am on an emergency tax code?

Check your payslip for the tax code. If it shows 1257L W1, 1257L M1, BR, or 0T, you are likely on an emergency code. The W1 or M1 suffix is the clearest indicator.

How long does emergency tax last?

It usually lasts until HMRC sends your correct tax code to your employer, which can take anywhere from a few days to a couple of months. Providing your P45 or completing a starter checklist speeds up the process.

Will I automatically get a refund?

If the code is corrected within the same tax year, yes. Your employer will recalculate your tax cumulatively and refund the overpayment through your pay. If the tax year has ended, you may need to claim the refund from HMRC.

Can I be put on emergency tax if I have not changed jobs?

It is uncommon but possible. If HMRC resets your tax code for any reason and your employer does not receive the new code in time, they may default to an emergency code temporarily.

Does emergency tax affect my National Insurance?

No. National Insurance is calculated independently of your tax code. Your NI deductions should be the same regardless of whether you are on an emergency tax code or your correct code.

Sources

• Emergency tax codes (gov.uk)
• Tax when you start working (gov.uk)
• Claim a tax refund (gov.uk)