How Much is Emergency Tax

How much is emergency taxPeople often refer to the ‘BR’ tax code as the Emergency tax code. Your employer will often put you on this tax code if you did not give them a P45 when you started working for them or if they didn’t know what tax code to put you.

How Much is Emergency Tax

Most people think that the emergency tax rate is higher than the ‘normal’ tax rate. In fact the emergency tax rate is the same as the lowest level of tax (Currently 20%). The reason why you end up paying more tax on a emergency tax code is because you do not receive any tax free allowance.

Tax  Free Allowances

Everyone that works in the UK is given a tax free allowance which is usually reflected in your tax code. For example the standard tax code for the 2011/2012 tax year is ‘747L’. If you multiple the number in your tax code by 10 it shows you and your employer how much you can earn before you need to pay any tax.

Your tax free allowance isn’t given to you in one go, it is allocated evenly through the year.

If you do not give your employer a P45, they do not know how much you have already earned already in the year and will therefore have difficulty in assigning you a tax code.  If you do not have a P45, you can complete a P46 instead and give this to your employer.


Emergency Tax Code = Losers Tax Code

If you are on an emergency tax code you can often be losing out on money. The amount that you are missing out on depends on how much you have earned and how much you have paid in tax.

If you are on an emergency tax code and have earned £7000. You would be losing out on £1,400.

Make sure you check to see if you can your tax back from HMRC if you think you may have overpaid tax on an emergency tax or BR tax code.

If you have questions about emergency tax codes please ask in the comments below and one of our experienced tax writers will be happy to reply.


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