Posted by admin - November 27, 2014 8:40 am HMRC set to collect more tax through PAYE tax codes

Warning: Changes to coding out

Under current systems, HMRC can collect up to £3,000 by changing an individual’s PAYE tax code. This is a process known as ‘coding out’ and it can be used to collect unpaid income tax on salaries and pensions.

This is set to change from next April for individuals earning over £30,000 when HMRC will be able to recover up to £17,000 through ‘coding out’, although this will be based on a sliding scale depending on income. Individuals earning less than £30,000 per annum will see no change from the current £3,000 limit.

These changes will affect underpaid Self Assessment and Class 2 National Insurance debts and also any overpaid Tax Credits. Changes will be reflected in 2015/16 PAYE codes.

If an individual does not want to pay back debt by coding out they need to pay the debt in full or contact HMRC to make suitable arrangements to repay the debt.

If you have any queries with regards to your PAYE codes then contact a member of your local MFW office who will be pleased to help.