What is the X tax code?

The X tax code is an emergency code used by HMRC when they don’t have all the details needed to assign your final tax code. While it’s in place, tax is taken at a basic rate, which could mean paying more or less than you should.

Typically, the X code is only a temporary fix and gets updated once HMRC has the information they need to apply the right tax code for you. If you spot the X code on your payslip, it’s worth checking in to make sure you’re paying the correct amount of tax.

Why you might be assigned the X tax code

You might be assigned the X tax code if HMRC doesn’t yet have all the information needed for your full tax code. It’s often applied in situations like when you start a new job, switch from self-employment to employment or begin receiving company benefits or a State Pension.

Similar emergency codes, like W1 (Week 1) or M1 (Month 1), also temporarily apply basic rate tax without adjustments, so keeping your details accurate can help avoid these, too.

While these codes are usually updated once HMRC has all your information, spotting them on your payslip is a good reminder to double-check that your tax details are up-to-date to avoid any overpayment or underpayment issues.

How the X tax code affects your pay

The X tax code affects your pay by applying a basic rate of income tax, without adjusting for personal allowances or other tax reliefs. This approach can lead to either overpaying or underpaying tax.

Overpayment is common, as the tax deducted might not consider your full allowances – meaning more is taken than necessary. On the other hand, underpayment can happen if the code doesn’t account for all taxable income or benefits, resulting in a lower deduction than required.

If you’re overtaxed, you’ll usually get a refund once HMRC has all the information. However, if undertaxed, you may need to pay the difference later on.

Steps to take if you're on the X tax code

1) Check your payslip

Look for the X tax code on your payslip. This code indicates HMRC needs more information to finalise your tax code.

2) Contact your employer

Ensure your employer has the correct details about your previous jobs, tax information and any changes in your work status.

3) Update your details with HMRC

Use your Personal Tax Account online to update any recent changes, such as new jobs, income sources or benefits.

4) Follow up for updates

Keep an eye on your payslip and tax code notices. Once HMRC receives the necessary information, they should assign the correct tax code, adjusting any deductions.

Getting a tax rebate if you've been overtaxed on the X tax code

If you’ve been overtaxed because of the X tax code, you may be eligible for a tax rebate. Once HMRC has assigned your correct tax code, any overpaid tax is usually refunded automatically. However, this doesn’t always happen promptly, and that’s where a helping hand can make a difference.

At RIFT, we specialise in making tax refunds simple and hassle-free. We’ll review your situation, help ensure all your tax details are accurate, and assist with any paperwork needed to claim your rebate. With us on your side, getting back what you're owed is easy and stress-free.

How to prevent being assigned the X tax code

To avoid being assigned the X tax code, it’s essential to keep your tax records up-to-date. Here’s how:

Provide complete details

When starting a new job, ensure your employer has all your tax details, including your P45 or information about any additional income.

Update HMRC directly

Use your Personal Tax Account to inform HMRC of any changes in employment status, income sources, or benefits.

Review your payslip

Regularly check your tax code on your payslip to spot any changes early.

Want help keeping everything in order? Get in contact with us. We specialise in tax refunds and can help ensure your tax code and records are accurate. Our easy-to-use tax rebate calculator will quickly show you if you’re owed money. If you've been overtaxed, we’ll help you get back what you’re owed, saving you from unwanted surprises.

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