The new PAYE service was launched earlier this summer with apparently very few problems.
Unfortunately, it now seems that there is a problem with some PAYE codes being issued by the new system. Some items included in PAYE codes under the old system, have not been carried forward to the new system. This has mainly affected state pensions and underpayments from a previous year which were being collected through the PAYE code but also include:
- not including married couples allowance unless the database has a date of marriage;
- agents’ copies being sent to previous agents;
- records wrongly amended to show taxpayer has died; and
- inability to reinstate omitted underpayment for previous year.
Omitting these items means taxpayers will pay too little tax.
This will only create a problem if a revised code has been issued since the new system was launched. Otherwise the employer will just continue with the same code as before. A new code will however be generated after a Form P11D has been processed where that showed changes in the values of benefits in kind.
HMRC is investigating the problem. Meanwhile, if you have any similar examples of omissions from code numbers:
- email the details to me;
- with your permission to reveal to your name to HMRC ;
- your National Insurance Number and ;
- the PAYE reference number (per the coding notice).
I will pass specific details to HMRC to help them trace the cause of the problem.
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