The aim of this blog post is to help in understanding why you could be assigned the 1100LW1 tax code. In addition to explaining how the 1100LW1 tax code applies to your earnings, we will also analyse the reasons why it could be assigned to taxpayers and how you can make sure that your tax payments are accurate if you are being assigned an emergency tax code as 1100LW1.

Why Is My Tax Code 1100LW1?

The reasons why you may have been assigned the 1100LW1 tax code are as follows:

  • you are a new employee
  • you have started a new job in the middle of the tax term
  • you do not have a P45 or you need a new P45 

Based on the above factors, the 1100LW1 tax code on your payslip indicates that the tax due on your current income has been calculated without taking into account your previous tax payments as well as without regarding your Personal Allowance.

1100LW1 is an emergency tax code which only applies to a specific period. If you are paid on a weekly basis, your payslip will mention this tax code to indicate that it is only being applied to your earnings during that particular week in question. This also indicates that this tax code is only assigned due to specific circumstances that apply to your current income and can change by the time your next payment is due.

1100LW1 is also a non-cumulative tax code. This means that while normal tax codes apply to an entire tax term and take your previous tax payments as well as Personal Allowance into account before an income tax rate is applied to your earnings, this will not happen if you have 1100LW1 as your tax code. Therefore prior tax payments will not be taken into account and no Personal Allowance will be deducted from your income before an income tax rate is applied.

Your tax code can be found on your payslip, P45 form, P60, PAYE coding notice, pension advice slip or the HMRC website. You should check if the same tax code is mentioned in all the relevant documents so that there is no error in your tax payments such as overpaid taxes.

If you have overpaid your taxes due to an emergency tax code you can claim a tax refund from HMRC after the end of the tax year. Claims for overpaid taxes can be made for up to four years. This means that an overpaid tax in 2022 can be claimed until 2026.

What Is The Meaning Of Having A Non-Cumulative Tax Code?

If someone is assigned a non-cumulative tax code it means that only the period in question for your tax calculation and deduction. This means that depending on whether you receive your pay on a weekly or monthly basis, a non-cumulative tax code will apply for that specific period only and it may change the next time you receive a payslip. In the case of weekly pay, you will find a W1 extension at the end of your tax code; while for a monthly salary your tax code will end with an M1 extension.

This also means that the income tax rate is applied to the entire sum of income(s) of an individual without the deduction of Personal Allowance from their earnings. In case an individual has paid a sum of income tax before a non-cumulative tax code is applied to their income, the amount cannot be adjusted. Therefore, there are chances that taxpayers will end up overpaying their taxes when a non-cumulative tax code is assigned to them in the middle of a tax term.

However, this overpaid amount is recoverable by contacting the HMRC and updating your employment information with them.

What Is The Meaning Of Having An Emergency Tax Code?

Having an emergency tax code on your payslip indicates that the tax code applies to a specific period and not the entire tax term. In most cases, emergency codes are also non-cumulative tax codes. This means that they are temporary and unlike regular tax codes, they can change in the middle of the tax term if there is a change in circumstance or income(s) of the individual that they are being applied to.

Some of the reasons why a noncumulative tax code such as 1100LW1 is assigned to a PAYE taxpayer include the following:

  • the individual is changing jobs and has been assigned a new tax code in the middle of the tax term 
  • the individual was previously self-employed and is returning to a salaried job 
  • the individual is returning to the workplace after a career sabbatical

If you are starting to work for the first time, you will not have a P45 as other employees do and will be asked to fill out a Starter Checklist (previously known as the P46) by your employer. Based on the information you provide, an emergency tax code will be assigned by HMRC until a permanent one is assigned for regular tax deductions.

Can I Reclaim Overpaid Taxes If My Tax Code Is 1100LW1?

Yes, you can reclaim overpaid taxes if you have paid an excessive amount due to a non-cumulative emergency tax code. 

To claim a tax refund, you will need to use the P60 form and share the following details with HMRC:

  • your earnings in total
  • the amount of income tax that you have paid
  • the amount of income tax that you have paid in excess

Additionally, you must also provide details of your National Insurance number and employer reference number.

Conclusion:

The above discussion helps to conclude that the 1100LW1 tax code is assigned to individuals if they have started a new job in the middle of the tax term, they do not have a P45 or need a new P45. The 1100LW1 tax code indicates that the tax due on your current income does not take into account your previous tax payments and there has been no deduction of your Personal Allowance.

References:

Understanding UK1100L Tax Code.

UK Tax Code 1100L Explained

My tax code is 1100L – Key Portfolio