Emergency Tax FAQs
What is an emergency tax code?
When HMRC does not have enough information about your income · new job with no P45, first pension withdrawal, untracked benefits · your employer or pension provider applies a temporary code. 1257L W1/M1 taxes each payment in isolation with one month's allowance. 0T gives no allowance at all. BR taxes everything at 20%, D0 at 40%, D1 at 45%. These commonly deduct far more than you owe.
Why was my pension withdrawal taxed so heavily?
First flexible withdrawals are taxed on a Month 1 basis: the provider gives you one month's allowance and one month's tax bands, treating the withdrawal as if you will take it every month. A £20,000 taxable withdrawal can have £7,000+ deducted when the true bill might be £1,500. Reclaim with form P55 (still taking income), P50Z (pot emptied, no other income) or P53Z (pot emptied, other income) · HMRC refunds in about 30 days rather than making you wait until year end.
How do I fix an emergency code on my salary?
Give your employer your P45 from the previous job, or complete the HMRC starter checklist. The code usually corrects within a payslip or two once HMRC receives payroll data, and because PAYE then switches back to cumulative, any overpaid tax comes back automatically through your next payslips in the same tax year.
Will I get the money back automatically?
Within the same job and tax year, yes · the correct cumulative code triggers an in-payroll refund. If the tax year ends first, HMRC's reconciliation sends a P800 letter and refund, typically between June and November. You do not have to wait: claim online through your Personal Tax Account as soon as you spot the overpayment.
What does W1/M1 actually mean?
Week 1 / Month 1 · non-cumulative. Each pay period is taxed in isolation, ignoring everything you have earned and paid so far this year. That stops payroll refunding or collecting arrears, which is exactly why overpayments build up on irregular income like mid-year job starts, bonuses and pension withdrawals.
For informational purposes only · Not tax advice · 2026/27 rates: PA £12,570, basic 20% to £50,270, higher 40% to £125,140, additional 45%, PA taper above £100,000 · Emergency month-1 basis uses 1/12 of allowance and bands · Reclaim forms: P55, P50Z, P53Z, or Personal Tax Account