What is emergency tax and can I claim it back?

You can find yourself on an emergency tax code and overpaying for many reasons.

We’ll explore the reasons why this might happen and look at how you can claim back any overpayment. 

What is emergency tax, and how does it work?

You usually get put on an emergency tax code because your correct tax code is not available to HMRC, so you end up paying more tax than you need to.

It’s important to understand that this is a temporary measure until you can be put on the correct tax code or until the end of the tax year. 

Unfortunately, when you're assigned an emergency tax code, you usually don’t receive any tax-free personal allowance, meaning you will pay too much income tax. 

If your tax code on your payslip contains ‘W1’, ‘M1’, or ‘X,’ that means you’re on an emergency tax rate. 

Why am I on emergency tax?

You might find you have been placed on emergency tax for several reasons.

These include: 

• You have started a new job, and HMRC did not receive your income details in time.
• Your employer accidentally used the wrong tax code.
• Working for an employer after being self-employed.
• Being in more than one job at the same time.
• Being a student and working during the holidays.
• Changing from a full-time to a part-time job.
• Receiving company benefits or the state pension. 

When might you get an emergency tax code on pension income?

You might have paid emergency tax on your pension income for any of these reasons: 

• Your pension provider has been using the wrong tax code.
• Your taxable income has gone down.
• The amount of state pension in your tax code was incorrect.
• You had more than one source of income, such as an extra pension.
• You’ve paid too much tax on a pension lump sum.

What is a P800?

A P800 is an end-of-year tax calculation letter that HMRC will send you if you have overpaid or underpaid on your tax.  

The letter will tell you if you need to pay more or whether you’re eligible for a tax refund.

There will also be a more detailed breakdown of the calculation.  

You don’t usually need to contact HMRC when you receive a P800 unless you believe there is a mistake in the figures. 

How can you claim back emergency tax?

You can get back overpayments caused by an emergency tax code in various ways.  

Firstly, if your P800 shows you’re due a refund, HMRC should tell you how they will repay you in the letter.

Commonly, this is by online bank transfer, using your personal tax account, or by cheque. 

Before receiving a refund, ensure the HMRC calculations match your records in case the payment is wrong.

If they send you an overpayment and you fail to declare it, they could charge you a penalty, plus you would have to send the extra money back. 

If you think you have overpaid tax in the current 2024/25 tax year, but this has not been communicated through a P800 notice, it’s likely there’s an issue with your tax code.  

To claim the tax back, you should inform HMRC before the end of the tax year, either online using your personal tax account or by telephone.

You can find the HMRC number on GOV.UK. 

Before you get in touch, make sure you have all the essential details to hand, such as: 

• Your name, address, date of birth and National Insurance number.
• Your employers and/or pension providers.
• Estimates of your earnings or pension income from each source during the tax year.

When claiming your HMRC emergency tax refund for a tax year that has already passed, it’s probably best to write to HMRC.

Be sure to mark your letter ‘repayment claim’ and use the address on GOV.UK.  

Your letter should include the full personal details mentioned above and copies of your P60s and P45s if you have them.

Clearly state why you are owed a repayment and how you would like to be paid. 

How long does it take to get emergency tax back?

If HMRC accepts your claim, it can take between five days and eight weeks to receive repayment.

The exact timing depends on whether you are reclaiming earnings from work or a pension, how you applied and whether any security checks were necessary. 

How to avoid emergency tax

In some cases, you won’t be able to avoid being put on an emergency tax code.

However, you can still minimise the chances by ensuring HMRC is aware of changes in your circumstances as soon as possible.  

A financial expert can help you understand your tax obligations and manage your finances.

Connect with a financial adviser with Unbiased today.