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FAQ - Emergency Tax

What is Emergency Tax?

The emergency tax must be used when:

  • The employer has not received a Form P45 for the current tax year or previous year from the new employee, or
  • The employer has not received either a Certificate of Tax Credits and Standard Rate Cut-Off Point or a tax deduction card for the current tax year, in respect of the employee, or
  • The employee has given the employer a completed Form P45 indicating that the emergency basis applies or
  • The employee has given the employer a completed P45 without a PPS number and not indicating that the emergency basis applies.

Tax is calculated on the gross pay (after deduction of pension contributions and permanent health contributions where relevant). Different rules apply depending on whether or not the employee provides an employer with his/her PPS Number.

The tables below outline the tax credits and cut off points applicable.

The standard rate of tax is 20%. The higher rate of tax is 42%.

<h6>Employee does not provide a PPS Number</h6>

Week or Month

Standard Rate Cut-off Point

Tax Credit

All

€0.00

€0.00

<h6>Employee provides a PPS Number</h6>

Monthly Paid

Standard Rate Cut-off Point

Tax Credit

Month 1

€2,667

€136

Month 2

€2,667

€0.00

Month 3 onwards

€0.00

€0.00

Circumstances will arise where, for example, an employee starts employment without a PPS Number, provides it in say week 3, but still has not provided a P45 or Tax Credit Certificate. As the PPS Number has been provided, tax should be applied at Week 3 per the schedule listed above and continued into week 4 and 5 etc, as appropriate, until such time as a P45 or Tax Credit Certificate is provided.

Where on commencement of employment, the emergency basis applies, and the employee provides a PPS number, the employer must take reasonable measures to ensure that the PPS Number provided, refers to that employee. The employer will be regarded as having taken reasonable measures where he or she checks the PPS Number provided against any of the ollowing documents:

  • A Certificate of Tax Credits and standard rate cut-off point in respect of a previous employment
  • A P45 from a previous employment which shows the PPS Number in respect of an earlier year of assessment or from a former employer in respect of the current year of assessment where the P45 indicates that emergency tax applied
  • A Social Welfare Services Card or PPS Registration Letter issued by the Department of Social and Family Affairs
  • A notice of assessment to income tax or capital gains tax
  • A P21 Balancing Statement
  • A P60 issued by a former employer which shows the PPS Number
  • Any other item of correspondence from the tax office which specifically quotes the PPS Number
  • A payslip from a previous employer which shows the PPS Number




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Testimonials

"I run my own business and after years of struggling with a demanding home life and a hectic work schedule I reached a situation whereby I was functioning poorly with both. I’d missed a couple of VAT payments and had intended to catch up at the end of the year. I missed my own deadlines and tried again to catch-up in the following year. Business became a stressful job of ‘fire-fighting’ each day’s demands, eventually pushing the issue of outstanding taxes out of my mind as much as possible, in order to concentrate on work.

That said, you always know in the back of your mind that these things don’t just go away and that it was just a matter of time before ‘they’ catch up with you. 

After a few years of letting my compliance payments slide altogether, the Revenue made contact with me and gave me an estimate of all PAYE, VAT and tax owed over the years – which ran to over 6 figures- and they wanted the money immediately. I knew I was in big trouble and looked in the Golden pages for an accountant who could help me. The name www.fixmytax.com jumped out of the page and I made contact. I was immediately reassured that they could help me. I was asked for “every bit of paper” concerning the office and all old Revenue correspondence.

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The accountant had dealt with the Revenue directly on my behalf and he saved over 60% off the original tax bill.

Throughout the process, the fixmytax accountant was hugely supportive to me, dealt directly with the Revenue, reduced the original tax bill considerably and most importantly, had taken the fear out of the situation and given me peace of mind knowing that good progress was being made with the Revenue, rather than hiding from it all.

The cost? Approximately 7% of the money SAVED on the original tax bill!

My Revenue mess caused me huge amounts of anxiety all the time I did nothing to resolve it. In dealing with fixmytax, they took control of the situation and proceeded to do what had to be done. I would not hesitate to recommend them to anyone worried about any aspect of taxation and financial planning for a business.

I now have a good relationship with the Revenue, fixmytax looks after not only the basics of compliance, but also the financial planning and regularly reviews the performance of the business. My business is now stronger and more focussed that ever before simply because of the level of ongoing collaboration and support that I have with fixmytax. They are the proverbial “good accountant” that every business needs.

My most valuable lesson in dealing with fixmytax is that it is far more productive and far less stressful to get a good supportive accountant to do what they do best, leaving me free to do business. Thanks, Patrick!

Satisfied Client, name and address with firm. 

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