Coding notices for the 2011/12 tax yearFriday, January 21st, 2011
The following is an extract from the latest weekly informal update (dated 14 January) from HMRC to employer representatives.
We are about to start the annual coding exercise to set the tax codes for the 2011-12 tax year. You will remember that that during the 2010-11 annual coding exercise at the beginning of 2010 there were a number of problems that led to us issuing some incorrect tax codes.
We have been working hard to make sure those problems do not happen again and that annual coding runs much more smoothly for us, you as employers and individual customers. We’ve put in place a number of IT fixes and carried out clerical reviews to bring together the information we hold. We have tested the system extensively and the results show a significant improvement in the accuracy for this year.
Our data can never be 100% accurate because we, employers and our customers make mistakes. But we expect the level of accuracy to be significantly better than 2010, and also better than the years in which we used our old IT system, COP. As I have said, we have done a lot of work to make sure the data we hold is much more accurate. You, as employers, can help us by ensuring the information you send us is complete and correct. That way the outputs we send to you and customers will be of a higher quality.
We expect to issue between 17m and 18m P9s to employers and pension providers between 23 February and 25 March.
We plan to send the P2 coding notices to individual customers between 17 January and 16 March, so you may well get questions from your employees about these. Can I take this opportunity to remind you that agents will not receive copies of P2 coding notices for their customers as this service was withdrawn in December 2010? The P2 sent to the customer will include a message suggesting that customers show it to their tax agent or adviser.
Some customers may receive more than one coding notice if they have multiple sources of PAYE income or pensions, even from within the same employer/pension provider. You may get queries from your employees about this, but it is entirely normal for us to issue a code in respect of each employment or pension.