P45 / P60

Tax refund UK emergency tax codes 2019/2020

Understanding the Tax code on your payslip

The UK has a list of tax codes that determine how much money you have to hand back to the taxman each year. Here's how to make sure you're on the right code for the 2019/20 tax year.

P45 Tax Refund example

Request tax refund application form

A P45 contains information about your gross salary earned through out the year and details the amount of tax you have paid in the current tax year, up to the point that you finished work in the UK. HMRC tax office will use this information to calculate your tax refund. You must send us the original P45 parts 2 and 3 and keep part 1 for your own records.

What to do if you lost your P45

If you have lost your P45 or P60 you will need to submit a Statement of Earnings as a substitute. As a first port of call, you should attempt to obtain these from your previous employer /recruitment agency.

The T and 0T codes: for £100,000+ income

If you’re a high-earner, the situation starts to get a little more complex.

For every £2 you earn over £100,000, you’ll lose £1 of your Personal Allowance. At this point you should be put on a T code, preceded by a figure showing the level of allowance you have left, providing any company benefits aren’t forcing you onto a K code.

When your income reaches £123,000, you’ll lose all of your allowance and your whole income will be subject to the appropriate rates of Income Tax. At this point, you’ll be put on a 0T code.

Compare savings accounts and tax-free ISAs

M and N codes: for the Marriage Allowance

You may be able to pass 10% of your Personal Allowance onto your spouse thanks to the Marriage Allowance.

If your annual income is £11,850 or less, and your partner is not a higher-rate taxpayer, you can pass on 10% of your Personal Allowance (£1,185 currently) to your other half.

The M code means that you have received 10% of your partner's allowance, while the N code means you have transferred 10% of your allowance to your partner.

BR, D0 and D1 codes: for second jobs and pensions

You’ll usually receive a tax code for each source of income you receive. If you have more than one income, you’ll be asked to state which is your main source, and this will have the appropriate level of Personal Allowance applied to it.

All other income will all be taxed without any allowance. If you pay at basic rate, additional income sources will receive a BR code, higher rate payers will get a D0 code and those liable for the additional rate will get the D1 code.

The NT code: when you pay no tax

An NT code will come through if no tax is to be taken.

This could be because your total income is less than your Personal Allowance, or you’re a self-employed contractor who is liable to pay National Insurance but not Income Tax.

W1 and M1: emergency tax codes

An emergency tax code is issued if HMRC does not have enough information about you to send your employer the correct code.

This usually happens if you start your first job and get your first source of income part of the way into the financial year, or you haven’t got a P45 from a previous employer.

P60 Tax refund example

A P60 other wise known as your statement of earnings

is a form used by HMRC at the end of each tax year to provide a total of your earnings and tax contributions. The full name is P60 (End of Year Certificate) and it is an annual statement issued to all PAYE taxpayers. The P60 is actually just one part of a three part tax form called the P14 (End of Year Summary)

When is a P60 issued ?

A P60 is commonly issued at the end of each tax year.A P60 contains exact information about how much you have earned PAYE (Paye As You Earn) and NIC's (National Insurance Contributions) you have paid during the specified tax year. It is your responsability to check your P60 and claim back any overpaid tax or report underpaid tax.

Example P45

P45 example - Claiming a U.K Tax refund 2019/2020

Your tax code will change at the beginning of the new tax year, April 2019, because the Personal Allowance amount is being raised.

This is good news for most and means that you can earn more money before you have to start paying income tax. laim tax back

Emergency tax code

The Basic PAYE Tax Code for 2019/20 The basic emergency PAYE tax code for employees is 1250L, it is also known as the ‘emergency code’ or the ‘default code’ and allows employees a tax-free Personal Allowance of up to £ 12,500 annually

1150 W1
1150 M1
1250L

What's my personal tax allowance ?

Each of us has a 'personal allowance', which denotes the amount we can earn without paying any income tax. If you earn more than your personal allowance, then you pay tax at the applicable rate on all earnings above the personal allowance, but the allowance remains untaxed.

How much could I get?

The amount you could be entitled to is worked out on a case-by-case basis because it depends on a combination of; your earnings, how much tax you have paid and which month you leave Britain.

It is worth knowing that any claim can be backdated by four years and that you do not have to be living in Britain to make the claim.

What do I need to show HMRC?

If you are leaving the UK permanently and you are not sure if you are returning or if you know you are going to be working abroad for at least one full tax year, then you need to submit a P85 to HMRC.

This should be accompanied by either a P45 or P60 certificate for the tax year in which you are leaving.

Different tax relief regulations have their own evidence requirements. For example; keeping a travel log of business travel or saving hotel receipts to prove accommodation and subsistence expenditure.

How to claim a tax refund

Usually between 6-12 weeks but this can vary depending on HMRC timescales and if further information needs to be provided.

If you have already left don’t worry you can still claim as long as you have left the UK within the last four tax years.

Why students commonly overpay tax

There are a few reasons why students often end up paying more income tax than they need to – and without even knowing it.

The most common situation is that when starting a part time job, employers will often put you on an 'emergency' or incorrect tax code (PAYE code) if you don't give them a copy of your P45 as evidence of your tax code.

Students who go on a placement year or work part-time during university also often do so over a period that spans two tax years which can confuse things a bit in the eyes of the HMRC (HM Revenue and Customs aka the tax man)

Most students don't end up earning over the tax-free personal allowance of within a single tax year (which runs April – April), but if you choose to work extra shifts at your part-time job during certain times in the year (over the Christmas holidays, for example) you could be totting up full time hours.

In this case, the tax man thinks your earning more across the whole year than you are, and will tax you accordingly… but you get it back!

What is the tax-free personal allowance?

By law, you can earn up to £11,500 in a tax year without having to pay any tax on it. You'll pay income tax at a rate of 20% on anything you earn above that.

This also applies to any income you make working abroad for the summer. As you're a UK resident

If your tax code is wrong

If you think your tax code is wrong you need to tell HMRC as soon as possible so it can be corrected.

You’ll need to have your tax reference and National Insurance number to hand – these can be found on your payslips or any letters from HMRC.

You can get hold of all of the contact details for HMRC by heading to its website.

You can also read our guide to contacting the taxman as painlessly as possible.

P45 & P60

Form P45: Your employer will provide you with a P60 when you stop working for them along with your final pay slip.

A P45 will contain all the information about your gross salary and details how much tax you have paid in the current tax year upto the point that you finished work in the UK. Your tax office will use this information to calculate your tax refund. Like most temporary staff workers If you had more than one employer in one tax year, sum up all your wages for that year based on information provided in your P60 and P45 forms (or the final pay slips) and add Total Tax. Tax Refund is calculated separately for each tax year. You may be entitled to a refund only for some of the years.