Why am I on emergency tax when my employment hasn't changed?

[AllarmBells]

I have been with the same employer for 3.5 years. This tax year I am on emergency tax (code D0). Does anyone know why this has happened? And how I can get off it?!

I got behind with my tax returns and haven't done one for a few years . I just wait till they send me a bill and then pay it. Could that be why? If I send in a tax return (I just registered to do one online) will they put me back on my previous tax code?

I have googled and looked all over hmrc.gov.uk but can't find anything that says "we do this to you when...." - all the advice on emergency tax relates to when you change jobs.

Am trying (and trying and trying) to ring the tax office but can't get through.
Any advice gratefully received!

Tax code D0 results in all your income being taxed at higher rate, currently 40%, with no tax free allowances being given. It is not the emergency tax code, it is a code generally used for a person's second job or pension when they have used all their tax free allowances and basic rate tax band in their first job.

Do you have any other sources of income which could explain this treatment? Why do you think you need to file a tax return, if you are required to file one you will usually be sent one automatically and would be charged penalties if you do not file it on time.

Have you been sent a notice of coding showing how your tax code has been arrived at? It sounds a bit odd if you have no other source of income other than this job.

There have been a lot of incorrect notices of coding sent out in January for the new tax year and it sounds as if yours may be one of them. That is probably why you are finding it so difficult to get through to the tax office! You might find it easier to write in and query your tax code - your payroll office can give you the address of your tax office and their employers reference, you alos need to quote your NI number ( can find this on your payslip or your last P60). The tax office often respond better to a letter as they know you can keep copies!

Brilliant, thanks cantcarryon. I will write to them today. I found all the details from my P60 and have the address.

I do get a tax return sent to me, but if you don't fill it in they send you what they think you owe (with a fine). Stupid of me to neglect it, I should have thought through what they can do if I annoy them!

I find it so complicated to fill in (durr) I used to battle on through it, but about 6 years ago they lost the form and asked for it again - I hadn't made a copy and I just thought "sod you then" and haven't done one since. My job is my absolutely only source of income apart from a few pounds (literally. it's something like £2.52) in interest from bank accounts. I don't even get any benefits on a P11D. That's why I resented spending the time and I don't understand why PAYE doesn't just take care of it. It's not unreasonable for them to bring me into line by overtaxing me - it's just that I'd never heard of it happening.

Anyway, after one month on D0 they owe me back!

Thanks again for replying - much appreciated.

Yes, you must make sure you fill in tax returns or they will CRUCIFY you!

This may be why they put you on D0, they are taking the view that you may have substantial other income so taking the maximum amount of tax from your PAYE.

Have you filled in the return for the tax year 2008/09? This was due at the end of Jan this year and if you did not may explain why they put you on this code. If you haven't, get it filled in ASAP ( you only have to fill in the sections that apply to you, so if job is your only income should be pretty straightforward). Use all the guidance notes and the tax calculation guide.

Once they have this they should amend your code and it is unlikely they will send you another return as you have no income that is not taxed at source.

Anyway, put this all down in the letter, ideally enclose the tax return if it is overdue, and get it all off to the tax office.

Hopefully it will all be sorted out quickly from there and you should receive an amended notice of coding. Your work will also receive a notification so should implement the new code automatically in the next pay period after they receive it. This will get your tax back to the correct amount and should result in a refund of the overpaid tax through the payroll (ie will be included in your normal pay, the details should be clear in your payslip). It may also result in a refund direct from the tax office if the estimated tax you paid for that year was too much.

You might need to nag the tax office a bit but they usually deal with this kind of thing pretty quickly once they have all the information. And if you have tax returns for previous years still unfilled get those filled in too as there may be refunds due for those years.

Good luck, and dont ignore tax returns in future!

Hi cantcarryon - quick update - I got a letter on Friday saying "we have changed your tax code from x to y" - as far as I know I've never been on x, but y is the one I was on before D0, so it appears to have naturally sorted itself out.

So I didn't need to anything...but in the panic I dug out all my records and signed up for internet access, so I can fill in the back returns online. So their mistake gave me a push to "come in from the cold".

Wanted to thank you for your advice and kindness...much appreciated

You're welcome AllarmBells

Sounds like yours was one of the cases where the new computer screwed up your tax code and they have now fixed it. Good news and you should get a nice tax refund in this month's payslip.

Filling in all those back tax returns is likely to get you a nice tax refund as well as the estimated tax you paid is likely to have been higher than your actual due. Hopefully more goods new to come!