2026/27 Annual coding notices - removal of Employment Expenses/Gift Aid Higher Rate Relief

23 Jan 2026

HMRC has advised that the 2026/27 annual coding notice process will include the removal of employment expenses and gift aid higher rate relief from some taxpayers tax codes from April 2026.

Employment Expenses

For taxpayers that have employment expenses over £120 coded, their 2026/27 codes are amended to remove the expense if they meet one of the following criteria:

  • no current PAYE income;
  • an employment gap of a full tax year since the employment expense was claimed;
  • no Self Assessment (SA) footprint since 2021/22, where there are indicators that the expense should have been resubmitted via SA; or
  • employment expenses within their code is higher than their 2022/23 SA return.

Where HMRC have data that indicates that the taxpayers’ circumstances have changed since they applied for employment expenses, HMRC are changing that tax code.

Higher Rate Gift Aid Relief

For taxpayers that have higher rate gift aid relief coded, their codes are amended to remove this relief from 2026/2027 if they meet all of the following criteria:   

  • the same amount of gift aid relief has been coded for at least three years; and 
  • there has been no SA footprint for at least three years. 

If a taxpayer or their agent believes that they remain entitled to gift aid higher rate relief and/or employment expenses from April 2026, they should submit their claim to HMRC.