What is the emergency tax code? This is a common question when you’re issued a different tax code from your regular one. There’s no doubt that emergency tax codes can be confusing, especially if you haven’t been issued one before. To learn more about the emergency tax code and why you may receive one, continue reading our helpful guide.
What is an emergency tax code?
An emergency tax code is a temporary tax code used when HMRC doesn’t have enough information to work out the correct code for you.
Rather than delay paying you, HMRC applies a temporary code so tax can still be collected while the missing information is being sorted out.
Getting an emergency tax code isn’t necessarily a sign that something has gone wrong. In many cases it’s simply part of the process when:
- Starting a new job
- Returning to work
- Receiving a pension for the first time
- Moving between different types of employment
- Receiving a large one-off payment
The important thing is making sure the code is corrected once HMRC has the information it needs.
Why are Emergency Tax Codes Issued? Common Reasons
There are several reasons why you may have been issued an emergency tax code, including:
- Starting a new job, and HMRC hasn’t received the correct income details
- Beginning work with an employer after being self-employed
- Receiving company benefits or the State Pension
- Working more than one job
- Changing from working full-time to part-time
- Your employer has used the wrong tax code for you
If you’ve experienced any of these circumstances recently, we advise checking if HMRC have put you on an emergency tax code.
What code is the Emergency Tax Code?
The emergency tax code is a temporary code ending in either W1, M1, or X. For example, if your regular tax code is 1257L and you were placed on an emergency tax code, it would then appear as 1257L W1, 1257L M1, or 1257L X.
What Do W1, M1 and X Mean on a Tax Code?
In the UK PAYE system, W1, M1, and X are markers that indicate your tax code is being operated on a non-cumulative basis. This means your employer calculates tax only on the current pay period rather than considering your total earnings and tax paid since the start of the tax year.
W1 (Week 1)
W1 stands for Week 1. It is used when you are paid weekly.
Under a W1 tax code:
- Tax is calculated only on that week’s pay.
- Previous earnings and tax deductions are ignored.
- It may result in temporary overpayments or underpayments of tax.
Example:
If your tax code is 1257L W1, your employer gives you only one week’s tax-free allowance each week, without looking at your year-to-date figures.
M1 (Month 1)
M1 stands for Month 1 and applies to employees paid monthly.
Under an M1 tax code:
- Tax is calculated only on that month’s earnings.
- Earlier pay and tax deductions during the tax year are not considered.
- It is often used when HMRC does not yet have complete information about your income.
Example:
A tax code of 1257L M1 means you receive only one month’s personal allowance for that pay period.
X
The X suffix has the same meaning as W1 or M1. It simply indicates that the tax code is being operated on a non-cumulative basis.
For example:
- 1257L X
- 1257L W1
- 1257L M1
All tell your employer to calculate tax without considering previous pay periods.
What is the difference between cumulative and non-cumulative tax codes?
Cumulative Tax Codes
A cumulative tax code takes into account:
- Your total earnings since the start of the tax year.
- The total tax you have already paid.
- Your unused personal allowance from earlier months or weeks.
This is the standard method used by HMRC and ensures you pay the correct amount of tax over the course of the tax year.
Non-Cumulative Tax Codes (W1, M1 or X)
A non-cumulative tax code ignores previous earnings and tax paid. Each pay period is treated separately.
Common Reasons for a Non-Cumulative Tax Code
- You have recently started a new job.
- Your employer does not have a valid P45.
- HMRC is waiting for updated income information.
- Your tax code is being reviewed or corrected.
Cumulative and Non-Cumulative Tax Codes Comparison
| Feature | Cumulative Tax Code | Non-Cumulative Tax Code (W1/M1/X) |
|---|---|---|
| Considers previous earnings | Yes | No |
| Considers previous tax paid | Yes | No |
| Adjusts for earlier overpayments | Yes | No |
| Adjusts for earlier underpayments | Yes | No |
| Usually used by HMRC | Yes | Temporary situations |
| Can cause temporary incorrect tax deductions | Rarely | More common |