HMRC have provided some information regarding their annual PAYE coding notice run for 2010/11. The message from HMRC follows.
BEGINS
Between now and March, HMRC will be sending PAYE Coding Notices to individuals telling them what their new tax codes will be for the tax year 2010-11.
Electronic notifications of changed codes to employers and pension providers are expected to start on 8th February, with paper versions scheduled to start on 22nd February. The despatch of all such notifications is currently scheduled to complete in the week commencing 15th March.
As this is the first time Annual Coding is being done with the new National Insurance and PAYE Service (NPS), we felt that it would be helpful ... to be aware of some of the differences that they and our customers may notice ...
For the first time, NPS has created a single record of an individual’s PAYE pay and tax details, allowing multiple sources to be linked and the tax deducted from all source shown together. The result will be improved accuracy.
One of the impacts of the move to NPS is that we expect more individuals than in the past to receive a Coding Notice for 2010-11 and future years. Reasons for this include:
- where better quality data allows the system to adjust codes automatically and allocate allowances for customers who have more than one employment or pension;
- where Age related allowances and Higher rate restrictions are applied more accurately as a result of automation;
- where the personal allowances taper for those with incomes over £100,000 has been applied; and
- where an agent is acting, we will now send a copy of each notice to the tax agent automatically, so agents will no longer have to request one.
Additionally, in this first transitional year, we expect to issue more coding notices than will usually be the case. This is due to
- the automated matching of employee/pensioner pay and tax details contained in 2008/09 employer end of year summaries identifying previously unrecognised employments or pension sources;
- the system creating new employment records where there has been a mis-match between the data held on our current system and the details supplied in the 2008/09 end of year summaries by employers and pension providers. The system may, therefore, generate more than one Coding Notice or an incorrect notice, where the system has set up another employment record for an existing employment.
As last year, we are including a flyer with the Coding Notice to explain it and ask customers to check it is correct. The flyer will direct customers to the HMRC website if they have any queries. Customers are encouraged to telephone HMRC if they still cannot resolve their query, but we recognise that they also may seek guidance from their employer, pension provider, tax agent or from a third sector organisation ...
In the meantime, if ... approached by customers who think that their Coding Notice is wrong, or who have received two different tax codes for the same employment, the following additional advice may help in deciding whether to contact HMRC:
- A Coding Notice is issued for every separate employment or pension source where there is a change to the customer's code number;
- If no change is appropriate, a coding notice will not normally be issued;
- No-one should normally get more than one Coding Notice for each employment or pension source;
- If there has been a data mismatch, customers may receive more than one Coding Notice for the same employment or pension source. These would normally be received on the same day or within a few days of one another, but in separate envelopes;
- If more than one Coding Notice is received for the same source, it is possible that one (or more) of the codes is wrong ... .
Technical Team
