On 2 July 2017, HMRC launched a new PAYE coding system that issues a revised tax code as soon as HMRC becomes aware of a change in an employee’s circumstances. An example of this may be the submission of a P46 (car), notifying HMRC of the provision of a new vehicle to an employee.
The revised tax code is also based on “estimated pay” – the predicted amount of income from an employment based on figures submitted via Full Payment Submission (FPS) files.
This new system is likely to increase the number of tax codes issued during the year, although there is no effect on the process of applying tax codes and submitting FPS and Employment Payment Summary (EPS) files for employers.
Employees can inform HMRC of changes in circumstance via their personal tax account. Using this account, employees can also check that the information for which their code is based on is correct.
For more information on the above or to discuss your payroll requirements please contact Katrina Offord, Payroll Manager, on 01305 215800.