UK Emergency Tax Code Explained (And What to Do About It)

An emergency tax code is a temporary PAYE code HMRC uses when it doesn’t have enough information to work out your usual tax code. You might get one when you start a new job without a P45, take on a second job, or make your first flexible pension withdrawal.

You may pay more tax than expected at first, but this doesn’t necessarily mean you’ve been taxed incorrectly. Once HMRC gets the right information, it can issue an updated tax code and correct any overpayment.

Here’s how emergency tax codes work, why you might get one, how much tax you could pay, and how to correct a code once it’s been issued.

Key points

• Emergency tax can reduce your take-home pay 💷
  A non-cumulative code can mean your previous pay and tax aren’t taken into account. Codes BR and 0T can also mean no Personal Allowance is applied to that employment.
• You can usually get overpaid tax back 🔄
  If HMRC corrects your tax code during the tax year, your employer can refund the overpayment through payroll. If it’s corrected after the tax year ends, HMRC may deal with the repayment instead.
• Pension withdrawals can be taxed heavily at first 🏦
  A first flexible pension withdrawal may be taxed as if you’ll receive similar payments for the rest of the tax year. You may be able to claim a refund before the tax year ends using the appropriate HMRC form.
• ANNA can help you keep track of your wider tax position 🚀
  If you’re also self employed or doing freelance work, ANNA brings your income, expenses, bookkeeping, and tax estimates together, so you can see what you’re earning and set money aside for your tax bill.

What is an emergency tax code?

An emergency tax code is what HMRC applies when it doesn’t have a full picture of your income, most often because you’ve started a job without handing over a P45 from your last one.

A normal tax code works cumulatively, meaning your Personal Allowance builds up across the tax year and gets set against your total earnings so far. An emergency code strips that away. You still get your full allowance, but it’s applied to each payslip on its own, with nothing carried over from earlier pay periods.

How people end up on emergency tax codes

Several common situations can trigger an emergency tax code:

• You start a new job without a P45: Your new employer may not have the information about your previous pay and tax for the current tax year
• You move from self employment into employment: HMRC may not have linked your new PAYE job to your existing tax record yet
• You return to work after a break: Time abroad, full-time study, or a period without employment can leave your previous tax code out of date
• You start taking pension income: A pension provider may not yet have the correct tax code when you begin drawing from a pension
• Your circumstances change: A new benefit, such as a company car, may need to be added to your tax code before HMRC can issue an updated one

Once HMRC has the missing information, it can update your tax code. The important thing is knowing what code you’ve been given and whether it’s likely to be temporary.

What emergency tax codes look like in 2026/27

Emergency tax codes have a suffix such as W1, M1, or X, which tells your employer to calculate tax on a non-cumulative basis.

However, HMRC can also use codes such as BR or 0T when your circumstances mean you can’t apply your Personal Allowance.

The most common codes you may see in 2026/27 are:

Whichever code you’re on, the effect is temporary, but the impact on a single payslip can vary a lot.

The real cost of an emergency tax code

Say you start a new job in August 2026 on £36,000 a year (£3,000 a month), having already earned £10,000 from an earlier job this tax year.

Your new employer gets the code 1257L M1, so they tax that month’s £3,000 on its own, ignoring your earlier pay and tax.

With a monthly Personal Allowance of £1,048, your calculation will look like this:

• Monthly pay: £3,000
• Monthly Personal Allowance: £1,048
• Taxable pay: £1,952
• Income Tax: £390.40

Once HMRC confirms this is your main job, your employer switches to a cumulative 1257L code, which looks at everything you’ve earned since 6 April.

By the end of August, that’s £13,000 total pay against a £12,570 allowance, so the calculation changes to:

• Total pay so far: £13,000
• Personal Allowance: £12,570
• Taxable income: £430
• Tax due so far: £86

Payroll compares this to what you’ve already paid. If you’ve overpaid, you get the excess back through your payslip or future tax reductions. If you’ve underpaid, your code adjusts to collect the rest.

A BR code makes the gap sharper still, since it taxes everything at 20% with no allowance at all. That comes out to:

• Monthly pay: £3,000
• Tax at 20%: £600

That’s a difference of £209.60 in a single month, though not necessarily over the year.

Codes like 1257L M1, BR and 0T are placeholders HMRC uses when it doesn’t yet have all the details of your income, but they don’t change what you owe.

Once HMRC has the full picture and your code updates, your yearly tax gets recalculated, with any overpayment refunded and any shortfall collected through a revised code or a bill.

So an emergency code might leave you short for a month or two, but your tax position sorts itself out once HMRC catches up.

ANNA’s Auto Accountant brings your income, expenses, and tax estimates together, helping you keep track of what you’re earning.

How to correct your emergency tax code

Correcting an emergency tax code comes down to giving your employer and HMRC the missing information about your income and circumstances.

Here’s how to do it:

• Give your employer your P45: If you’ve left a previous job during the tax year, hand your new employer your P45. It shows your previous pay, deducted tax, and tax code, so they can set up your PAYE record correctly from the start.
• Complete a Starter Checklist: Your employer will ask you to fill in HMRC’s Starter Checklist if you don’t have a P45. It covers your employment circumstances, including any other jobs or benefits, and gives your employer enough to work out the right code while HMRC updates your record.
• Check your tax code with HMRC: You can check your tax code through your Personal Tax Account on gov.uk or the HMRC app. Check it when you change jobs, take on an additional one, or start receiving pension income.
• Contact HMRC if the code doesn’t change: If you’ve provided all the right information but are still on an emergency code after a few payslips, contact HMRC directly or update your details through your Personal Tax Account. HMRC can review your record and issue an updated code to your employer, who then applies it to future pay and corrects any tax you’ve overpaid so far this year.

Will you get money back automatically?

If you’ve overpaid Income Tax because of an emergency tax code and your code is corrected during the tax year, the overpayment will be refunded through your payslip.

For example, suppose your first few payslips were taxed using an emergency code, and you paid £500 more tax than you owe. Once HMRC issues the correct cumulative code, your employer’s payroll system can recalculate your tax position for the year so far.

If your tax code isn’t corrected until after 5 April, the refund won’t come through your employer’s payroll. HMRC will instead reconcile your tax position after the tax year ends.

If HMRC finds that you’ve overpaid, you may receive a P800 showing the refund due. You can also contact HMRC if you believe your tax calculation is wrong.

Did you know?

You have four years from the end of the relevant tax year to claim a repayment of overpaid tax, so an old emergency tax code doesn’t necessarily mean the money is lost.

Emergency tax codes and overtaxed pension withdrawals

A first flexible pension withdrawal can also be taxed using an emergency tax code, which can result in too much tax being deducted from a one-off payment.

This happens because your pension provider may not yet have a tax code for you. For an initial flexible withdrawal, HMRC’s PAYE system can treat the payment as if you’ll receive the same amount regularly for the rest of the tax year.

If you’re only taking the money once, this can result in a much larger tax deduction than you owe.

You don’t necessarily have to wait until the end of the tax year to get the difference back. Depending on how you’ve taken the money and whether you’re still receiving pension income, you may be able to claim a refund using one of these forms:

• P55: Generally used if you’ve taken a flexible pension payment but haven’t emptied your pension pot and aren’t taking regular payments
• P50Z: Generally used if you’ve emptied your pension pot and stopped working
• P53Z: Generally used if you’ve flexibly accessed all of your pension and still have other taxable income, such as a job or the State Pension

The right form depends on your circumstances, so check HMRC’s guidance before making a claim.

How ANNA helps with your tax admin

An emergency tax code can make it harder to see how much tax you owe, especially if you’ve recently changed jobs or have income from more than one source.

ANNA brings your business finances and tax admin together, so you can better track your income, expenses, and tax position.

Here’s how ANNA can help:

• Real-time tax estimates: See an estimate of the tax you may owe as your income and expenses change
• Automatic bookkeeping: Keep your transactions organised and your accounts up to date without entering everything manually
• Receipt capture: Store receipts as you spend, so you have a clear record of your business expenses
• Expense categorisation: Keep business spending organised and see your deductible expenses instantly
• Invoice creation and tracking: Create invoices, track payments, and monitor money coming into your business
• Self Assessment filing: Prepare and submit your Self Assessment tax return through ANNA, covering income from your business and other sources
• Corporation Tax filing: Calculate and file your company’s Corporation Tax return, and stay on top of your company tax obligations
• Smart Pots: Set money aside automatically for upcoming tax bills
• Dedicated UK business account: Keep business income and spending separate from your personal finances
• VAT filing: Organise your VAT records and file VAT returns with MTD-compatible tools
• 24/7 UK-based support: Get help with your account or tax questions whenever you need it

Sign up with ANNA today and keep your tax admin up to date with ease.