HMRC has clarified when it will issue new tax codes. The matter came to light after a question from a taxpayer who had been put on an emergency tax code. They wanted to know when they would be put on the correct tax code again.
They went on to explain that they had been put on an emergency tax code for the fourth time since starting their new job. They asked: « My new employer has sent my P45, can you please tell me when the emergency tax code will be removed and I will be issued any refund? »
You may be put on an emergency tax code if you situation changes, such as moving to a new job, and if HMRC does not have all your up-to-date details. It’s worth checking if you are on an emergency tax code as this could mean you are paying income tax on all your income, and missing out on the £12,570 personal allowance you may be entitled to.
A basic rate taxpayer missing out on the personal allowance they are entitled to could pay £2,514 a year too much in tax. A P45 is a document that you get when you stop working for an employer.
This will outline how much tax you have paid during the current tax year and it’s important your new employer has this, to make sure you are on the right tax code in your new role.
Responding to the taxpayer, HMRC said: « If you start a new job, you hand your P45 in from your old employer into your new employer. Your new employer reviews your previous pay, tax paid and the tax code on the P45 then they will use this for your next pay. »
The person said they had given their P45 to their new employer but they were stil on an emergency tax code. HMRC said: « If you’ve given the P45 into your new employer, they should have used the tax code for your subsequent pay dates.
« You’ll need to contact the helpline so an adviser can check what has happened and manually issue the correct tax code. » You can call up HMRC about income tax queries by calling 0300 200 3300. Line are open Monday to Friday from 8am to 8pm and on Saturdays from 8am to 4pm.
When does HMRC issue tax refunds?
HMRC also shared this guidance with the taxpayer: « Normally, we wait until we have your new employer’s details and your old employer’s final information before issuing the correct tax code. Once applied, this will ensure any refund is processed on your next payment. »
