Starting a new job should be exciting — until you see your first payslip and wonder why so much tax has been taken. If this has happened to you, you’re probably on emergency tax. Here’s what’s going on and how to fix it.
What is Emergency Tax?
Emergency tax is a temporary tax calculation employers use when they don’t have your complete tax history. Without knowing:
- What tax you’ve paid so far this year
- Your correct tax code from HMRC
- Whether you have other jobs
…your employer applies default rates that often result in overpaying tax.
It’s called “emergency” because it’s meant to be temporary — a placeholder until HMRC provides your correct code.
How to Spot Emergency Tax
Check Your Tax Code
Look at your payslip for these emergency tax indicators:
| Code | What it means |
|---|---|
| 1257L W1 or M1 | Standard allowance but on week 1/month 1 basis |
| 1257L X | Non-cumulative (same as W1/M1) |
| BR | All income taxed at 20%, no allowance |
| 0T W1 or M1 | No allowance, non-cumulative |
| D0 | All income taxed at 40% |
The W1 (week 1) or M1 (month 1) suffix is the key indicator. This means each pay period is treated in isolation, ignoring your year-to-date position.
Your Take-Home is Much Lower Than Expected
Calculate what you should receive:
- Gross pay minus National Insurance (8% on earnings over £12,570/year)
- Minus income tax (20% on earnings above £12,570/year)
If your actual pay is significantly less than this, emergency tax is likely the cause.
Example: The Impact of Emergency Tax
| Monthly salary | Normal tax | Emergency tax (BR) |
|---|---|---|
| £3,000 gross | £286 | £600 |
| Take home | £2,524 | £2,210 |
| Overpaid by | £314 |
On an emergency BR code, you lose your Personal Allowance entirely — that’s potentially £314 per month overpaid on a £36,000 salary.
Why Does Emergency Tax Happen?
1. No P45 From Previous Employer
Your P45 tells your new employer:
- How much you’ve earned this tax year
- How much tax you’ve already paid
- Your tax code
Without it, they don’t know if you’ve used your Personal Allowance elsewhere.
Solution: Chase your previous employer for your P45. By law, they must provide it.
2. Didn’t Complete the Starter Checklist
If you don’t have a P45, employers should give you a Starter Checklist (formerly P46). This asks:
- Is this your first job since 6 April?
- Have you had another job this year?
- Are you receiving State Pension or other pensions?
Your answers tell the employer which emergency code to use. Without this, they apply the most cautious (highest tax) approach.
Solution: Complete the Starter Checklist your employer provides.
3. First Job Ever
If this is your first job, you won’t have a P45. Your employer should use Starter Checklist statement A (“this is my first job since 6 April and I haven’t received benefits/pension”), giving you full Personal Allowance.
If they got this wrong, you may be on emergency tax.
4. Gap in Employment
Returning to work after a period of unemployment? You might not have a P45 if you received benefits, or your previous employer closed down.
5. Multiple Jobs
Starting a second job? Your first employer should have your Personal Allowance, so the second job uses BR (20% on all earnings). If the second employer gives you another allowance (1257L), you’ll underpay tax — and owe it later.
6. HMRC Systems Delay
Sometimes HMRC is slow to update records. Your employer might have your P45, but HMRC hasn’t confirmed your code yet.
Types of Emergency Tax
1257L W1/M1 (Week 1/Month 1 Basis)
What it means: You get 1/12th of your annual Personal Allowance each month — but no catch-up for allowance already unused.
Impact: Usually close to correct if you’ve worked all year. May underpay if you’ve had earnings gaps.
BR (Basic Rate)
What it means: All income taxed at 20%, no Personal Allowance.
Impact: Significantly overpay tax — your £12,570 allowance is ignored.
0T (Zero T)
What it means: No Personal Allowance, but taxed at scaled rates (20%, 40%, 45%) based on income level.
Impact: Similar to BR for basic rate taxpayers.
D0 (Higher Rate)
What it means: All income taxed at 40%.
Impact: Severe overpayment — usually applied to second jobs where the employer assumes you’re already a higher rate taxpayer.
How Emergency Tax Gets Fixed
Automatic Correction
Most emergency tax situations resolve themselves:
- HMRC receives your details from your employer’s payroll
- HMRC calculates your correct code based on their records
- HMRC sends the code to your employer within a few weeks
- Your employer applies the new code and adjusts future payslips
- Overpaid tax is refunded through your wages
This usually happens within 1-3 pay periods.
How Refunds Appear
When your code is corrected, your next payslip shows:
- Your new correct tax code
- Higher net pay than your previous month
- Possibly a negative “tax this period” figure (meaning tax refunded)
Example correction:
| Month 1 (Emergency) | Month 2 (Corrected) | |
|---|---|---|
| Gross pay | £3,000 | £3,000 |
| Tax deducted | £600 | −£28 (refund) |
| NI | £190 | £190 |
| Net pay | £2,210 | £2,838 |
The Month 2 payslip includes a refund of the Month 1 overpayment.
How to Speed Up Correction
Step 1: Provide Your P45
Give your new employer Parts 2 and 3 of your P45. They’ll submit this to HMRC, triggering code allocation for your new employment.
Step 2: Complete the Starter Checklist
If you don’t have a P45, complete the Starter Checklist accurately:
| Statement | Use if… |
|---|---|
| A | This is your first job since 6 April and you haven’t received benefits/pension |
| B | This is your only job but you’ve had another since 6 April |
| C | You have another job or pension |
Statement A gives you full Personal Allowance immediately. B or C trigger more cautious treatment.
Step 3: Contact HMRC Directly
You can speed things up by:
Online (fastest):
- Go to gov.uk/personal-tax-account
- Sign in with Government Gateway
- Check/update your employment details
- HMRC will recalculate and send the correct code
By phone:
- Call 0300 200 3300 (Income Tax helpline)
- Have your NI number, employer name, and payroll details ready
- Ask them to issue the correct code
Step 4: Check Your Online Tax Account
Sign into your Personal Tax Account to see:
- Tax codes assigned to you
- Estimated tax for the year
- Any discrepancies
If something looks wrong, update it online or call HMRC.
What If the Tax Year Ends Before Correction?
If emergency tax continues until April and you’ve overpaid for the whole year:
- HMRC sends a P800 in June-October
- The P800 shows total tax paid vs tax owed
- You receive a refund by cheque or bank transfer
For large overpayments (more than a few hundred pounds), you can claim a refund before the P800 by:
- Using your Personal Tax Account online
- Phoning HMRC
- Completing form P60 refund claim
Common Emergency Tax Situations
Situation 1: First Job After University
Problem: No P45, employer applies BR code.
Solution: Complete Starter Checklist with Statement A. You should receive 1257L code and get your full allowance.
Refund expectation: Often substantial — students starting work in summer may have overpaid £500+ by October.
Situation 2: Started in January After Redundancy
Problem: Gap since September, no P45 available.
Solution:
- Complete Starter Checklist with Statement B
- Contact HMRC to confirm you had no earnings since September
- Your cumulative allowance for the year (£12,570) hasn’t been used — you should get catch-up refund
Situation 3: Second Job on Wrong Code
Problem: Second job given 1257L instead of BR — you’re underpaying tax.
Solution:
- Inform your main employer you want primary allowance there
- Inform your second employer you have another job
- HMRC will correct, but you may owe tax at year end
Situation 4: Returning from Overseas
Problem: No UK earnings this year, employer assumes you’ve worked elsewhere.
Solution:
- Provide evidence of overseas residence
- Complete Starter Checklist with Statement A (if this is your first UK job of the year)
- HMRC should allocate full allowance
Avoiding Emergency Tax
Keep Your P45 Safe
When leaving a job, your employer must give you a P45 within “reasonable time” — typically the same day as your final pay. Keep it until you start your new job.
Start New Job Documentation Promptly
On your first day:
- Give your P45 to HR/payroll
- Or complete the Starter Checklist thoroughly
- Provide National Insurance number and personal details
Update HMRC About Changes
Keep HMRC informed when you:
- Change jobs
- Start receiving State Pension
- Stop receiving benefits
- Move address
Refund Claim Companies: Don’t Pay Them
You may see adverts for tax refund companies claiming they can get your emergency tax back. Don’t use them.
- They charge 25-40% fees for work HMRC does free
- The same refund comes automatically or via simple online claim
- They sometimes submit incorrect claims causing future problems
HMRC handles all emergency tax refunds directly at no cost.
Key Takeaways
- Emergency tax happens when employers don’t have your tax details
- Look for W1, M1, BR, or 0T codes on your payslip
- It usually resolves within 1-3 months automatically
- Give your employer your P45 or complete the Starter Checklist to speed correction
- Check your Personal Tax Account online for your tax code status
- Refunds come automatically through future payslips or annual P800
- Don’t pay refund companies — HMRC processes refunds for free
This guide covers typical emergency tax situations. If your circumstances are complex or refunds don’t arrive as expected, contact HMRC on 0300 200 3300. This is not tax advice.