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PAYE cumulative basis

What dictates PAYE being calculated on a cumulative basis?  Some of the directors who I do payroll for have PAYE calculated on a cumulative basis and others do not.  Can anyone explain why this would be? 

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Tax Code

This is determined by the tax code and if it is Week 1 (non cumulative) or otherwise.  For example 944L would be cumulative but 944LW1 only considers tax due on that period without considering the year to date position.

 

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Increased PAYE code

All Month 1 codes are wiped back to cumulative at the start of the tax year.  If the PAYE code is then increased at some point during the year to deduct more tax, it will be applied on a Month 1 basis so that the employee does not have to pay the arrears of the additional tax back to the start of the year.  The PAYE coding notice will often come with a note saying "we estimate that you will have underpaid £x during this tax year", which is then collected by adjustment of the PAYE code for the following year.

The other common reason for a Month 1 code is where the employee has started during the tax year and the emergency code has been applied.

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Thank you for your responses, they have been a big help.

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