Pictured above: Bobby Gupta

Stratford-based chartered accountancy firm Murphy Salisbury is warning employees that the 'emergency' tax codes which employers use when no tax code is available are set to change later this year.

Tax partner Bobby Gupta said: "The most common form of emergency code is where an employee starts a new role and is unable to provide a P45, while such codes are also used where payments are made after the employment has ended and a P45 has already been issued.

"At present, the code 'BR' must be used, which requires tax to be deducted at the basic rate, but from 6 April the appropriate code will be 'OT', which requires tax to be deducted at basic and higher rates where appropriate".

The amount of difference this makes is likely to be determined by both the size of the payment and the time in the tax year when the payment is made.