PAYE coding out

PAYE coding out

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I have had a number of self assessment clients call me as their request to have tax due collected by PAYE coding has been ignored by HMRC and they have received unexpected bills for both payment of tax due and payment accounts.

I have checked the HMRC website and it simply states any amount up to £3000 can be collected by coding out.However a phone call to HMRC has revealed that there are other criteria being applied. While I understand that these may be justified, they surely must be clearly communicated both to the taxpayers and agents and also the refusal should be communicated to the taxpayer and their agent..

I don't need calls from clients who have checked the HMRC website and think I am somehow to blame for HMRC rule changes that I know nothing about.

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By Cathy R
19th Dec 2014 15:40

I don't think the rules have changed, they won't code it out if it means more than doubling your tax deductions or if it would leave you with less than 50% of your paye income.  I believe this has always been the case.  I had one recently though where HMRC had not coded it out because they had estimated the client's income to be too low to collect it, because he had changed employer during the year.  A phone call sorted it out and they allocated it to be collected through the code.

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By vince8
19th Dec 2014 16:18

Other criteria?

What is the other criteria?

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By HeavyMetalMike
19th Dec 2014 16:48

pm me.

I had this issue 2 years ago. Or was it last year?

I dug my heals in and sent a "brilliant" letter outlining the tax due on 10K without the PY tax being coded out an then the tax with it being coded out. Lo and behold the "twice the tax" alleged issue wasn't there and it got coded out.

By HMRC rationale anyone with a salary of 10K can't have anything coded out, even £100 say, as £100 is more than twice x £0???

 

so pm if you want more details. or the letter..............

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