What is MTH1. Does this have to do with new employees.?

Question

I am newly employed in UK and have received my first salary, which shows a taxation of average 39% and the tax code is MTH1. Why is this so high. I have not yet filled P46.

Answer 1

IT sounds like Month 1 to me until you are properly coded.
(emergency tax code)

Answer 2

You are employed and your tax is deducted under the Pay As You Earn system. This is normally operated on a cumulative basis. This means that, for example, in December (month 9), your total earnings in the tax year to date are used to calculate the total tax you are due to pay up to the end of month 9. Your employer then deducts the difference between that figure and the cumulative figure up to the end of month 8.

In your case the employer does not have details of your earnings before the start of your employment with him. He therefore calculates the tax as though each month was the first in the tax year, ie on a month 1 basis. This will deduct tax at the correct rate for the current month but will not give you any refunds for unused allowances before your employment commenced.

Complete the form P46 as soon as possible so that the code number can be adjusted.

Answer 3

This is used until the tax office can inform your employer what the correct code should be. Fill in and give your employer the P46 ASAP - they will send it to the tax office who will then issue a correct tax code. This will be based on your prior earnings and tax paid etc

Answer 4

http://www.tax.org.uk/advice/emergencytax.html