Dynamic PAYE coding – how is it affecting you?

In past news items, Making tax digital prompts more frequent code numbers and involves personal tax accounts published in April 2017and HMRC’s Agent Update issue 60 published in June 2017 we noted the imminent arrival of Dynamic PAYE Coding. This will now enable HMRC to make quicker use of RTI data to update tax codes.

Dynamic coding will mean more tax code changes to reduce the number of over- and under-payments at the end of the tax year, to be refunded/collected either in a code number or as a lump sum payment. Taxpayers who experience hardship as a result of having underpayments collected more quickly should contact HMRC to discuss spreading collection of the underpayment.

Please would you comment below on how Dynamic PAYE Coding is affecting you/your employees/your clients. Are you receiving more frequent code number updates and, most importantly, are code numbers accurate?

HMRC is encouraging taxpayers to visit their online personal tax account (PTA). In the PTA taxpayers can amend estimated income from employment and other sources and employment expenses (the latter are called ‘allowances’) for the current and following tax year, which should feed through to code numbers.

How easy do you find the PTA to use?

Taxpayers can access their PTA by logging onto www.gov.uk/personaltaxaccount and signing in using a Government Gateway (GG) ID and password. Taxpayers who do not already have a GG account can set one up straightaway. They should have to hand their national insurance number, a telephone number, and either a P60 or a payslip as certain details on these will be needed. These documents are needed only when signing up for the first time. Subsequently, all that is needed is the GG ID and password, plus an access code that will be sent to their phone each time they log in.

If you let us have actual examples of problems you have encountered we can use these in our future discussions with HMRC to help them make their new system work better. Please send details to peter.bickley@icaew.com  and include NINO and PAYE scheme reference numbers and what the code was and should have been.

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  • i checked 4 new codes for clients today, all 4 were wrong. They had been updated following submission of 2017 tax returns or P11Ds and all seemed to have ignored various parts of what was submitted.
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