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tax code
RTI and Incorrect Tax Codes
Oh dear. HMRC has admitted that real time exchange of data is creating new employment records and, as a result, the issue of incorrect tax codes. This all stems from incomplete alignment submissions that have been made in the following circumstances: Where the alignment process has only been completed in part by the [...]
Trivial Commutation Tax Code Changes
Sections 636B and 636C of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) specify that some lump sums paid from registered pension schemes are treated as taxable pension income. These trivial commutation and similar lump sum payments include: Trivial Commutations payments (and death payments) Winding-up lump sums (and death payments) Commuted equivalent [...]
FAQ – Why could there be 53 payments in a tax year and how do we handle the payments?
It is essential that the relevant tax Week or Month is applied to payments in the payroll system. For determining in which tax period a payday falls, an employee’s payday is the earlier of: the date on which the payment is actually made, and the date on which the employee is contractually entitled to be [...]
Collecting Tax Debts Through the Tax Code
In July 2011, we reported that the PAYE Regulations had been amended to give HMRC the powers to recover tax debts of up to £3,000 by means of an adjustment to an employee’s tax code. These powers are effective from tax year 2012/13. Recoveries are at HMRC’s discretion and can be made without the consent [...]
2012/13 Tax Year Coding Notices
The Learn Centre is focused on education and communication. It is our business and both of these are essential in our day-to-day professional lives. Also, increased and improved education and communication can reduce the pressures on both the payroll and HR departments. In this spirit, we are passing on information on the HMRC Website, designed [...]
Questions from our Forum – 07/11/11
Each week we receive a number of payroll questions on our forum, and here are this week’s batch. Can you help with any answers? Forum Post A new employee presents two P45s. What should the employer do? I have a new employee that used to have two jobs and had their tax code split between [...]
Collecting tax debts through the tax code
Changes to PAYE Regulations take effect from 6 April 2012 Last week’s newsletter included an item about HMRC taking new powers to recover tax debts of up to £3,000, at HMRC’s discretion and without the debtor’s consent, by means of adjustments to tax codes. The PAYE Regulations have been amended accordingly and the new powers [...]
Collecting tax debts through the tax code
HMRC plans to start automatic collection of tax debts under PAYE from April 2012. HMRC has issued a Technical Discussion Paper in order to finalise the statutory changes required to allow tax debts of up to £3,000 to be collected automatically under PAYE by means of a tax code adjustment. This process, known as “coding [...]
Coding notices for the 2011/12 tax year
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 [...]
HMRC’s final word on 0T tax code issues?
The latest weekly informal update (dated 26 November) from HMRC to employer representatives is one of three announcements that have been issued over the past week to explain the changes that are being made to the use of tax code 0T from April 2011. The others are two separate emails that were sent to payroll [...]
How do we decide which tax code to use from form P45?
One of the basic principles of PAYE is that, when an employee moves from one employer to another, the tax code used by the previous employer is also used by the new employer. However, that is not always possible. Form P45 is completed by an employer when an employee leaves and has four separate parts. [...]
