EmergencyTax.Org – Learn more about the BR tax code http://www.emergencytax.org Helping you with your tax code Sun, 04 Mar 2012 08:17:51 +0000 en-US hourly 1 https://wordpress.org/?v=4.7.8 What Percentage is Emergency Tax http://www.emergencytax.org/2011/06/what-percentage-is-emergency-tax/ Wed, 29 Jun 2011 12:44:15 +0000 http://www.emergencytax.org/?p=74 Each year many thousands of people in the UK are put on an emergency tax code. There are a number of reasons why you might be placed on an emergency tax code, for example if your employer was not given a P45 or you have a second job, but whatever reason most people that are […]]]> Each year many thousands of people in the UK are put on an emergency tax code. There are a number of reasons why you might be placed on an emergency tax code, for example if your employer was not given a P45 or you have a second job, but whatever reason most people that are put on an emergency tax refund end up overpaying tax.

Tax Rates in the UK

Currently there are four tax brackets:

1. If you earn below £7,475 you rate of tax is 0%. This is also known as your personal allowance.

2. For any amount above the personal allowance between £0 and £37,400 you will pay tax at the basic rate of 20%

3. If you earn over £37,400 you will pay 40% tax

4. And finally if you earn over £150,000 you will pay tax at 50%

 

What Percentage is Emergency Tax

This is one of the most common questions that we get asked. Most people think that the emergency tax rate is higher than 20, 40 or even 50%. However, you may be surprised to find out that emergency tax is only at 20%!

Even though the emergency tax rate might be at 20%, you still usually loose out if you are on it because you do not receive any of your personal tax free allowance.

 

Tax Free Allowance

Most regular tax codes include a number. This number corresponds to your tax free allowance and tells your employer to give you this allowance in each pay cheque. If you are on an emergency tax code you will not receive any of this allowance and can end up overpaying tax by many hundreds of pounds.

If you have been put on an emergency tax code any time in the last 4 years, there is a good chance that you can make a claim with HMRC. We recently wrote an article on how you can claim your emergency tax back. If you have any further questions, please leave them in the comments below.

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Claiming Back Emergency Tax http://www.emergencytax.org/2011/06/claiming-back-emergency-tax/ Tue, 28 Jun 2011 18:36:31 +0000 http://www.emergencytax.org/?p=68 There are a number of reasons why you may have been placed on an emergency tax code. It is not uncommon to be put on an emergency tax code incorrectly and as a result you may overpay tax. If you have overpaid tax because you have been on an emergency tax code you can claim […]]]> There are a number of reasons why you may have been placed on an emergency tax code. It is not uncommon to be put on an emergency tax code incorrectly and as a result you may overpay tax. If you have overpaid tax because you have been on an emergency tax code you can claim this back in the form of a rebate. There are deadlines on making claims for a tax rebate so make sure that you make your claim before it is too late.

Can Everyone Claim Back Emergency Tax

Not everyone on an emergency tax code can claim this tax back. For example, if you have a second job, this additional source of income should usually be taxed using the tax code BR (another name for the emergency tax code). The reason why second jobs are taxed at this rate is because you should be receiving your tax free allowance in your first job.

How to Claim Back Emergency Tax

At the end of the tax year (April 6th) you can claim back any overpayment of  emergency tax for the previous tax year. If you are working for an employer on the last day of the tax year, they should provide you with a P60 in April or May. Once you have your P60 you can make your claim. Note: If you finished working for your employer before the end of the tax year, you would not receive a P60, you should have been given a P45 when you finished working for your employer and this can be used instead to claim your tax back.

Once the tax year is over and you have your P60 (or P45) you can make your claim. All you need to do to make your claim is to write to write to your local tax office (you should be able to find their address in the Phone Book), including your P60 (or P45) and A covering letter telling them why you are writing to them. Note: That you may need other forms including a P91, P85,P86 if HMRC do not have a complete work history for you or if you are not from the UK or are leaving the country.

Once you have sent your letter to your local tax office refunds should take between 6-8 weeks to process and be sent back to you. During some busy periods, like tax return deadlines, tax offices can be busy and your refund may take longer to process.

Questions or Comments

If you have any questions or comments about claiming an emergency tax refund, please leave them in the box below.

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How Much is Emergency Tax http://www.emergencytax.org/2011/06/how-much-is-emergency-tax/ Mon, 27 Jun 2011 21:08:22 +0000 http://www.emergencytax.org/?p=64 People 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 […]]]> 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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Emergency Tax http://www.emergencytax.org/2011/06/emergency-tax/ http://www.emergencytax.org/2011/06/emergency-tax/#comments Mon, 27 Jun 2011 21:00:47 +0000 http://www.emergencytax.org/?p=56 The emergency tax is a special tax code that is used by your employer or the company who provides your pension until the HM Revenue and Customs (HMRC) office can properly place you into a taxing bracket.  Emergency tax works by providing for you a basic personal allowance in the form of a small variable […]]]> Emergency Tax CodeThe emergency tax is a special tax code that is used by your employer or the company who provides your pension until the HM Revenue and Customs (HMRC) office can properly place you into a taxing bracket.  Emergency tax works by providing for you a basic personal allowance in the form of a small variable amount of tax-free pay. The emergency tax however does not take into account any special circumstances that you may have, nor does it grant any allowances or special entitlements that you may otherwise qualify for.

There are several reasons why you maybe put onto the emergency tax code. For the majority of people who are designated to emergency tax, they have started a new job but their previous employer has not sent a form P45 for that tax year. The second most common reason people are placed on emergency tax code is because they have begun their first job following the start of the taxing year; however, the employee has not been receiving any taxable benefits from a state or a company pension. Additionally, a worker maybe placed onto emergency tax if they were previously self-employed and have begun working at a new job. For a small percentage of workers on emergency tax, they have been placed on emergency tax because of their work history.  If the worker begins a new job and has had one or multiple jobs previously before beginning the new job, the HMRC may give you an emergency tax identifier.

There are different types of emergency tax, there is a “cumulative” emergency tax and there are emergency tax codes called “week 1” and “month 1” codes. What these means is that for a “cumulative” emergency tax code designation, you will have had to tell your employer that you have not worked previously to the start of your new job during the tax year. A “cumulative” emergency tax qualified you for a full personal allowance that is tax-free over the remainder of the tax year. The tax codes called “week 1” and “month 1” are used for situations where your tax code may have been reduced by a large amount, where you have had a different job or have received benefits from the state during that tax year, or even if you have previously used a “week 1” or a “month 1” tax code. In the case of a “week 1” or a “month 1” tax code, the HMRC will ascertain you to have been receiving personal allowances, so any creditable allowances remaining will be allocated over the remaining course of the year.

 

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