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PAYE Coding Notices

PAYE Coding Notices

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We have begun filing RTI reports for the new tax year, 2014/15.

As it is a new year we have been checking the online coding notices HMRC have sent us regarding our clients.

We have noticed that a large numbers of coding notices for employees of clients have come through which has reduced their coding notice. These are ‘straight forward’ employees who, in the past have received full allowances and have only one job and no complications etc.

Has anyone else found this problem and is it a case of HMRC computers messing up again?

Replies (10)

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By Craigie_Bhoy
09th Apr 2014 12:47

There have.

.been a few similar posts recently.  I myself recently got my new tax code fairly recently which elimated my entire PA.

You are not alone.

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By bendybod
10th Apr 2014 09:02

Probably!

I've noticed that a fairly significant proportion of our employees have received coding notices that appear to be wrong.  Of course, I don't know the ins and outs of all of their tax affairs but employees who were on a straight 944L last year have suddenly got one in the 500s or 600s.  I am advising them to contact HMRC to ask how they have been calculated.

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By bernard michael
10th Apr 2014 10:18

I have received 3 employees

For a client whose payroll we do I have received 3 employees moved from 944L to BR but when I asked HMRC why I was told it was confidential to the employee and unless I was their agent I could have no information 

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By bendybod
22nd Apr 2014 16:23

Codes

That is standard.  The employee gets notification from HMRC about how their tax code is made up, but that information is confidential - because they may have other income sources which are not their employer's business - so HMRC will not talk to an employer about an employee's tax code.  A BR code may be issued if the employee has another job or if they have pension income - and that can happen at a very young age if the individual has an Armed Services history as I had once.  If you believe it is because HMRC haven't processed the P45 from a previous employment (perfectly possible) then I would talk to the individual and say something along the lines of 'if you have no other income, including pensions, then contact the Taxes Helpline and inform them that you only have one job'.  They will need their date of leaving their previous employment.  I believe it is still the case that if the employee makes the call in your presence, they can authorise HMRC to discuss it with you if they are uncomfortable speaking to HMRC themselves, but they will still need to make the initial call themselves.

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By ACDWebb
22nd Apr 2014 19:45

Presumably these are not

high earners who have been drawn into the HICBC charge and are now suffering a full years deduction?

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By bendybod
22nd Apr 2014 22:08

Definitely not in my case
No, mine aren't. It seems most likely that HMRC have split their codes over two employments despite the fact that they don't have two employments. I lost track of the number of employees I told to phone HMRC in the tax year just passed and days later got a new coding notice. The trouble with RTI is that most of our employees are weekly paid, so the previous employer hasn't necessarily submitted a P45 by the time I submit our first FPS. I have an added operational issue that means that people often get put on before they've been paid because the timesheet system dictates that they have to be on the system from the day they start work but get paid almost a week in hand and I can't always get a starter declaration before I submit the next FPS - in which case they get 0T codes.

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By dnicholson
23rd Apr 2014 00:44

Multiple employments
Did you take over as the payroll provider during the 13-14 tax year?

If it did and you didn't set up the old payroll ID's when you took over, HMRC will have created new employments for the employees (at the same employer). This will now be followed by new tax codes.

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Replying to paulwakefield1:
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By bendybod
23rd Apr 2014 12:09

Been there, done that one!

No, but I did make the mistake of correcting the start dates of employees during 2013-14 which created the problem that you mention.  It did, eventually get sorted out, as our PAYE account was out of balance for months.  These are all newer employees though who weren't affected by the previous issue.  I suspect that they are merely a victim of HMRC failing to process leaver information properly.  I know they haven't processed many of our leavers under RTI because I received coding notices for several employees who left us during 2013-14.  I'm failing to recognise very many benefits with RTI at all, other than discovering more quickly that HMRC have messed up.

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By lionofludesch
23rd Apr 2014 10:11

Major change

I've had several changing 0T to BR.

I thought HMRC had decided that 0T was better than BR, just in case, somebody was going over the higher rate threshold.  An unlikely scenario, in my opinion, but presumably HMRC have had a rethink as all the "second income" codes I've had are now BR.

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By lionofludesch
23rd Apr 2014 12:21

Why ?

What benefits were there supposed to be for employers, employees or agents ?

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