What is the point of emergency tax?

Question

It annoys employees, employers and the tax office. Why can't the govt scrap this and put everyone on the basic tax code? At the moment it's £5435, then goes to £6035 from Sept 2008. Also, why has my employer put me on emergency tax despite of me giving my P45 and filling in a P46

Answer 1

Because the govt wants more money for themself

Answer 2

So-called "emergency tax" IS the basic tax code.  The only difference is that if your periodic pay fluctuates wildly (eg you get more than about £3,500 in one month but not others, there is some overdeduction at that time which is not automatically returned to you in the next pay period.

Answer 3

He should not do so and you should demand an explanation. You can also contact your nearest tax office and seek their advice on this.

All the best!/

Answer 4

emergency tax should only be used where the employee does not provide a p45 from their previous job or where the employer is instructed to do so by the tax office.

Its to ensure there is no financial loss to the Revenue.

If you've filled in a P46, that to me, indicates that the P45 you supplied may not have been relevant to this tax year.  YOur employer should have sent the P46 to the tax office and asked which code to operate on you.  Until they receive a response they are well within their rights to operate emergency tax.  Once your code gets amended you'll get the refund in your pay packet!

Answer 5

Emergency tax is used as a middle ground for where there is not enough info or a person is starting the job before the paperwork can be dealt with. 99% of the time it will result in the individual overpaying their tax.

Not all people working in the UK are entitled to the personal allowance, for example a US national who comes here to work for less than 6 months.

You should contact your HMRC office to sort out your coding.