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Emergency Tax Help

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VW Taxation - Emergency Tax Specialists

With the UK workforce consistently changing, it is now reasonable that many workers may change jobs or careers much more than what was previously standard. Unfortunately, HM Revenue and Customs (HMRC) may frequently lose track of your work status and profile, which causes a possible change of your tax code, known as emergency tax.

Since receiving an emergency tax code can mean the loss of potential savings and deductions on your tax return, it is important to know when emergency tax may be assessed and what the details are surrounding the reason why your tax codes were changed by HMRC. This guide will explore this often misunderstood type of taxation and offer guidance on how emergency tax codes can affect your tax refund.

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What Is Emergency Tax?

Emergency tax is a type of income tax assigned by HMRC to taxpayers who have not supplied the correct details and information to the department based on a number of different factors. Emergency tax codes are usually applied to taxpayers who may have suddenly changed employers and failed to supply the new employer the correct forms to submit to HMRC.

Each job you work has its own corresponding tax code based on your type of employment and filing status. If HMRC doesn’t have updated information about a new job, an emergency tax code will be applied to you for the rest of the tax year or, until you provide HMRC with the updated information so the department can correctly assess how much tax needs to be deducted from your pay.

How Does Emergency Tax Work?

Each employer a taxpayer works for assigns a unique PAYE code to each employee for the tax year. If you suddenly change an employer, the information is not automatically transferred to HMRC, therefore, an employer will assign emergency tax codes as a standard taxation protocol since the needed information is missing for the previous taxes paid by an employee earlier in the tax year.

Additionally, an emergency tax code can be applied to a new employee under the PAYE system who was previously self-employed, which is the second most common cause of emergency tax codes. An employer needs to know how much a new employee has paid so far in the tax year, along with how much tax was deducted, as well as any personal allowance a new employee qualifies for.

This type of tax has a special rate, which is always much higher than what you would normally pay, which is why it is important to get emergency tax help as soon as you notice the higher rate of tax.

If you receive a payslip that has any of the following tax codes, this means that you are being taxed in this bracket.

BR (Basic rate)–this code signifies that you are not receiving your personal allowance
OT ( This also corresponds to no personal allowance)
1250L W1
1250L M1
1250L X

How Much Is Emergency Tax and What Is the Rate?

When you start a new job under the PAYE system, you are allowed a personal allowance which should be reflected on your proper tax code. Your employer will submit all of the details of your new job to HMRC (typically through the gov.uk website).

If this information is not submitted due to a change of employer, then the tax code will go into effect. The cost of this tax is the basic rate for most taxpayers without a personal allowance.

What Percentage Is Emergency Tax?

The basic rate under the emergency tax code is 20%, which is similar to what self-employed individuals and those under the CIS pay. If you end up with the OT tax code, this is a bit more alarming as you will have to pay the basic rate, an additional rate, and the higher rate of whatever you tax situation falls in.

What Is the Emergency Tax Code?

The tax codes that fall under this category are used to collect tax when the situation of a new taxpayer suddenly changes, usually through a new employer. One of the above-mentioned tax code brackets is assigned as a placeholder, which will require your attention to be fixed.

You can give your employer a P45 form that comes from your previous employer to fix the situation. If you are unable to get this form or if you are in a situation that requires no P45 form, you can get emergency tax help to better help you figure out how to get on the proper tax rate that you should be on.

Frequently Asked Questions

Why Am I Getting Emergency Taxed?

Some reasons for being emergency taxed include suddenly changing employers which causes your previous tax details to be missing. Those who are self-employed and become employed under the PAYE system are also prone to receive this kind of tax code.

Do You Get Emergency Tax Back?

Yes, you can get emergency tax back by making a claim on what you have paid directly to HMRC. For the best results, letting a taxation specialist help you is always the best course of action.

How to Claim Emergency Tax Back

You can make a claim directly to HMRC or, allow an accountant or tax specialist to make the claim for you. Be sure to have all of the required documents showing how much you were paid and how much tax was deducted.

How Do I Stop Being Emergency Taxed?

The simplest way to resolve the situation is to get a P45 form from your previous employer and submitting the form to your new employer. If you do not have a P45 form, talk to a tax specialist to find out exactly what you may need to do to stop the process.

How Can We Help You?

VW Taxation prides itself on the level of help we provide our clients year in and year out. If you are being emergency taxed, contact us today for a free consultation to help get you on the proper tax rate that corresponds to your new situation.

Navigating this issue with HMRC can be complicated and our specialists are trained to not only make the process easy for you, but also to get back every bit of overpayment you made to HMRC during the process.

FREE no-obligation quote:

Tell us how we can help and what issues or concerns you may be having so we can make this process as easy and efficient as possible for you.