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HMRC incorrect tax codes latest

27th Jan 2010
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Taxpayers and agents (including some members) are reporting incorrect tax codes sent by HMRC for 2010-11.

Members have been sharing their coding issues on our Any Answers forum.

HMRC said it had no evidence of a widespread problem but advised taxpayers to check their codes carefully.

Andrew Hubbard, of the Chartered Institute of Taxation (CIOT) commented: “Most people on PAYE are used to assuming that what the taxman sends them is correct, but this year, many of them are being given wrong information, and unless they spot it and tell HMRC, their employer will receive the wrong information too. They could get a nasty shock when they open their April pay packet and see it is as much as a hundred pounds lighter than they are expecting”.

It is not clear how many incorrect tax codes have been sent out, or may be distributed in the coming weeks. The CIOT said the scale of the problem might be indicated by the fact that this year about 25 million coding notices are being distributed, which is about twice last year's number. tax editor Rebecca Benneyworth explained: “The new PAYE computer system launched in July (called NPS) is in play for the first time for the code run. The big difference is that the master file system is organised by employee name rather than by employer, allowing HMRC to marry up records of people who have more then one job/pension etc.

“Ultimately this will be much more efficient as it will allow accurate issue of tax allowances where someone has several part time jobs and wants part of their allowances transferred to a second job. However, this is the first year, and the system has collated data from P35's, some of which is a bit suspect. So HMRC are already warning that this year there will be extra code notices and there may be some bugs that are coming through due to duplicate records. Their advice is to wait for a bit and see whether any more notices come through - which means that the systems have reconciled the issue”.

For those seeking more detailed guidance, will run an update on the situation with the latest advice from HMRC in February.

Replies (10)

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Mark Lee headshot 2023
By Mark Lee
27th Jan 2010 15:41

Advice from TV news this morning

On BBC Breakfast this morning an HMRC spokesman was at pains to stress that:

a) there is no computer glitch

b) the new system is doing all that they wanted from it

c) replacement codes are intended to reflect corrections identified within HMRC

d) anyone who is concerned should check the latest code they receive

John Whiting of CIOT noted that HMRC's answerphone message asks that anyone with a Coding Notice query should please wait until after 31 January before calling back

Also important to note that this is all about Codes that will not become active until after 6 April 2010. So there could well be a few more corrected codes being issued between now and then.

Mark Lee



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By stephenkendrew
27th Jan 2010 17:43

not always next year

We've got one employee of a client who appears to have reached 65 at the wrong time - in January 2010. HMRC have altered the tax code to take into account their pension but got the calculation completely wrong.

I calculate that, by April 2010, she would be worse off by about £1,000 if we used the tax code that HMRC have instructed us to use. What are we supposed to say to this employee when we have calculated the wages so that she is taking home about £350 less than she should be. HMRC's answer is wait until next month!

Whilst these are always issues with tax codes, there seems to be more this year. I've got one client who has been given a tax code for their employment with another client - one does not and has never worked for the other, indeed they don't even know one another the only connection is that we are the accountant for both. Others have tax codes for employments that they haven't had for over two years or their personal allowance has been allocated to a dormant company rather than the employer they have had for the last ten years.



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27th Jan 2010 19:38

Incorrect Tax Code - think not

As it seems the country is broke,vvhat better vvay in getting more money into the coffers.  More revenue is generated and if you and happen to notice then hey a revised tax code is issued and a rebate made.  If hovveer general public assume the code is correct then more money for the Treasury.  Call me a sceptic but as Baldrick ould say, I have a cunning plan ....

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By donquixote34
28th Jan 2010 14:22


So its a completely new system and the Revenue can't answer your questions till next month.


I have a question.   Why issue them in January when they're bedding in a new system?   Why EVER issue them in January of all months?

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By raybackler
29th Jan 2010 11:07

P11D information mistakes

I had two clients yesterday - one marvelling at the magical massive increase in their tax code and one horrified by a similar decrease.  Both errors were to do with P11D data.  One made Other Expenses taxable and the other gave an allowance for business expenses when they had already been shown as Travel.  Both should have had a nil effect on the tax code!  If that's not a glitch I don't know how else to describe it to clients.


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By kenfrost
29th Jan 2010 12:10

HMRC's Coding Enigma

HMRC's explanation for this foul up is changing on a day to day basis

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By User deleted
29th Jan 2010 15:06

HMRC incorrect coding notices

Yes I have come across this problem with my partner who has received 2 coding notices, a "K" code for the existing employer and "BR" for the former employer - both of which are and would have been incorrect.  There seems to be a problem with employees whom are made redundant but whom immediatley take up employment elsewhere; a break in communication at HMRC.  I am hoping that the P46 issued on behalf of the new employer and the letter explaining the issue will assist in elucidating the problem.  However, this was more than 2 weeks ago and no revised coding notice has been received as yet. 



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By User deleted
30th Jan 2010 00:41

it's just mad!

I have received 3 tax code change notifications within a 2 month period. I had to call them and write to them in order to get them to change it back to 647L all 3 times. I just hope they made up their mind for good now...

It's tricky though as some people will not debate any tax code change notice they receive and they will probably rely on HMRC getting it right! Terrible, terrible mistake...


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By cymraeg_draig
31st Jan 2010 10:41

Dead wrong - literally

We have received a new code for a client who died in 2005.

The notice is even addressed to Mrs * ******(deceased).

I wonder if I should ask for the address of their clairvoyant section.

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By Sheila Morrison
02nd Feb 2010 10:06

Tax codes

The Revenue have really messed this up.

My acting clients (all self employed, as actors are) have been issued with BR codes for anyone who has paid them over the last two years! The Revenue's response was "these employers should know the rules and probably will not implement the new codes. However, if they do so in April, get in touch. It will not make any difference anyway as they can reclaim the tax" True!!

I have got better things to do in January than telephone the Revenue only to be told it's not a problem. My clients think it's a problem.

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