Emergency tax is not a higher rate of tax. It is a temporary tax code, 1257L followed by W1, M1 or X, that taxes each payslip on its own, so anyone who has not been paid all year loses the allowance they built up and pays too much until HMRC corrects the code. It arises in two common situations: starting a job without a P45, and taking a first taxable withdrawal from a flexible pension. In both cases the over-deduction is recoverable, and for most employees it comes back through pay without a claim.
The figures use the 2026/27 rates for England, Wales and Northern Ireland: a personal allowance of £12,570 and a basic rate of 20% up to £50,270.
What 1257L W1, M1 and X mean
gov.uk lists three endings: W1 for weekly pay, M1 for monthly pay, and X where pay dates vary. Some payslips print NONCUM instead. The allowance is standard; the suffix is the problem. A cumulative code works out the tax due on total pay since 6 April, using the share of the allowance and bands accrued so far, and deducts what has already been paid. A W1, M1 or X code ignores the year to date and taxes each period as if it were the only one, with one week’s or one month’s allowance and band. HMRC’s guidance describes the effect as being taxed as though that amount were paid every week or month of the year.
gov.uk gives two triggers: a new job where the employer does not have the previous income and tax details, which in practice means no P45, and starting to receive company benefits or the State Pension. HMRC says it will usually update the code once it has details from both employers, and that “This can take up to 35 days from when you start your job.”
A worked example: starting in October on £30,000
Someone starts on 1 October on £30,000 a year, paid £2,500 a month, with no earnings since 6 April. October is month 7 of the tax year.
Under 1257L M1. One month’s allowance is £12,570 / 12 = £1,047.50. Taxable pay is £2,500 minus £1,047.50 = £1,452.50, all inside one month’s basic rate band of £3,141.67, so tax is £1,452.50 x 20% = £290.50, the same as in any ordinary month on £30,000.
Under a cumulative 1257L code. Seven twelfths of the allowance is available: £12,570 x 7/12 = £7,332.50. Pay to date is £2,500, below that figure, so taxable pay to date is £0 and the tax is £0.
If the code were never corrected, the rest of the year would look like this.
| Month | Pay to date | Tax under 1257L M1 | Tax under cumulative 1257L |
|---|---|---|---|
| October (month 7) | £2,500 | £290.50 | £0 |
| November (month 8) | £5,000 | £290.50 | £0 |
| December (month 9) | £7,500 | £290.50 | £0 |
| January (month 10) | £10,000 | £290.50 | £0 |
| February (month 11) | £12,500 | £290.50 | £195.50 |
| March (month 12) | £15,000 | £290.50 | £290.50 |
| Total | £15,000 | £1,743 | £486 |
The correct tax on £15,000 of earnings in a year is 20% of the £2,430 above the allowance, £486. The emergency code takes £1,743, an overpayment of £1,257. Payroll rounds the allowance to £1,048, so a real payslip shows £290.40. The emergency tax calculator runs the comparison for any start month and salary.
The reverse applies to someone who earned well earlier in the year: an M1 code gives a fresh month of allowance and basic rate band whatever came before, and gov.uk lists “finished one job, started a new one and were paid by both in the same month” among the reasons a P800 may show tax owed.
How the refund reaches an employee
No claim is normally needed. gov.uk says that when a code is corrected and too much has been paid, HMRC asks the employer “to refund the difference in your pay”, and that a monthly paid employee should see the new code applied on “your next pay or the following pay”. In the example, if the cumulative code arrives for November, payroll finds £0 due on £5,000 of pay to date against £8,380 of accrued allowance, and the November payslip shows a tax refund of £290.50: the mechanism in why did I pay more tax this month, running in reverse.
If the tax year ends first, HMRC reconciles the year afterwards. gov.uk states that P800 tax calculation letters “are sent out between June and March of the following tax year”. Where a refund is due, gov.uk gives three timescales: money “within 5 working days” for an online claim by bank transfer, “6 weeks” where a cheque is requested, and a cheque “within 14 days of the date on your letter” where HMRC pays automatically.
Emergency tax on a pension lump sum
The second case involves no employer. When someone takes a first taxable payment from a defined contribution pension under the flexible access rules, the provider usually holds no current tax code. HMRC’s PAYE manual states that “the scheme administrator will use the emergency tax code on a month 1 basis against the first payment”, or, where a recent P45 exists, will operate that code on a month 1 basis.
On a large one-off payment the effect is severe. A £10,000 taxable withdrawal with no other pay that month gets £1,047.50 of allowance, £3,141.67 taxed at 20% (£628.33) and the remaining £5,810.83 taxed at 40% (£2,324.33), a deduction of about £2,953. For someone whose only other income is a £15,000 pension, the correct tax on that £10,000 for the year is £2,000; with no other taxable income it is nil.
Three forms reclaim the difference during the year.
| Form | Who uses it |
|---|---|
| P55 | Flexibly accessed the pot “but not emptied it”, will not take regular or further flexible payments before the end of the tax year, and the pension body cannot make the refund |
| P53Z | Flexibly accessed all of the pension and has other PAYE income, “one or more existing employments and / or multiple pensions” in HMRC’s words |
| P50Z | Flexibly accessed all of the pension and stopped work, with no other PAYE or pension income apart from the State Pension |
HMRC repays P55 claims by Faster Payments to the nominated account and, in the words of the form, “We’ll make checks at the end of the tax year and contact you if the amount is different.” gov.uk prints no fixed turnaround for P55 or P53Z and points to HMRC’s reply-times tool instead. For P50Z it says “It may take 14 days to get a reply”, and the form should be sent only “when 4 weeks have passed since you stopped work or finished your pension”.
HMRC changed part of this from April 2025. Its pension schemes newsletter of January 2025 states that it “will automatically update the tax code for customers who are on a temporary tax code and would benefit from being on a cumulative code”, so that people new to receiving a private pension “pay the right amount of tax faster”. The same notice confirms that “The rules for taxing first pension payments are not changing as part of this and the normal rules of PAYE will continue to apply.” The first payment is still taxed on the month 1 basis; later regular payments should move to a cumulative code without a request. The pension drawdown calculator models withdrawals over a year.
How to avoid it
- Hand over the P45. HMRC’s starter checklist tells employers that if the P45 arrives after the first payroll submission they should “use the tax code shown in parts 2 and 3 of the P45”, so a late P45 still helps.
- Choose the right starter checklist statement. Statement A (“This is my first job since 6 April”, with no Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit received since then) gives the full allowance on a cumulative basis. Statement B (another job since 6 April but no P45, or one of those benefits received) gives it on a week 1/month 1 basis, the emergency code. Statement C (another job or a pension in payment) gives code BR, 20% on everything. Ticking B when A applies produces the over-deduction above.
- Read the code on the first payslip. W1, M1, X or NONCUM after the code, or BR or 0T where the allowance is not used elsewhere, means the correction has not landed. The tax code checker decodes it and the payslip abbreviations guide covers the rest of the slip.
- Take a small first pension withdrawal. A nominal first payment is taxed on the month 1 basis and prompts HMRC to issue a code to the provider, so the larger withdrawal that follows is taxed against that code. Providers set their own minimum amounts.
Common questions
Is emergency tax a higher rate? No. The code carries the standard allowance; the W1, M1 or X marker only stops payroll from looking at earlier months.
How much emergency tax will I pay? The tax a full-year earner on the same salary pays every month: £290.50 on £2,500. Someone starting in October with no earlier pay loses £290.50 a month until the code changes.
Do I have to claim emergency tax back? For a job, usually not: HMRC issues a cumulative code and the refund comes through pay, or a P800 follows after the year ends. For a pension lump sum, a P55, P53Z or P50Z claim brings the money back sooner than waiting for the P800.
How long does an emergency tax refund take? gov.uk says the code is usually updated within 35 days of starting a job and applied on the next or following monthly pay. After a P800, an online bank transfer claim is paid within 5 working days and a requested cheque within 6 weeks.
Why is my code BR rather than 1257L M1? BR follows statement C, for a second job or a job alongside a pension: gov.uk describes it as all income from that job “taxed at the basic rate”. If the allowance is not in fact used elsewhere, a P45 or a corrected starter checklist restores it and the excess is refunded through pay.
Information, not financial advice. Figures use the 2026/27 rates for England, Wales and Northern Ireland and are estimates to help you understand the rules. Check your own circumstances against gov.uk or with your payroll department or pension provider before acting on them.