Reactive tax codes

by Aspiring Training on February 28, 2017 No comments

HMRC is about to start updating tax codes more frequently from April 2017.

This will help HMRC collect the tax due more quickly. Any underpayments of tax identified for 2016/2017 will be collected through the 2017/2018 tax codes. But the same tax codes will also be used to collect potential tax underpayments for 2017/2018.

As a result, an employee could experience a double hit on their 2017/2018 PAYE code, and pay more tax in that year. However, no employee should have more than 50% of their earnings deducted through PAYE.

Employers will have to deal with more PAYE codes being issued for employees, and it will be important for employers to keep up with these changes. Employees should be advised to contact HMRC directly if they do not agree with their tax code.

Aspiring TrainingReactive tax codes

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