HMRC are making the changes in a bid to help people pay the right tax on their income as they earn it. This new trigger will help make sure more customers are on the correct tax code and paying the right tax at the right time. It will also reduce the number of customers receiving unexpected tax bills at the end of the tax year.
The vast majority of PAYE taxpayers won’t notice a change, some however may notice their employer switches them to the correct tax code sooner.
If a customer’s financial circumstances change between 6 January 2019 and 5 April 2019 (the final quarter of the tax year) and the amount of tax due in the current year is affected, HMRC will adjust the tax code, but only start to collect the tax from 6 April 2019, to make any tax changes more manageable for the tax payer. When HMRC implement the new trigger this could result in employers, pension providers and payroll providers receiving more tax codes over the first few months, but if the codes are operated the volumes should return back to the normal volume.
Further details as they become available will be available in the Employer Bulletin.
CIPP comment
We know that the first port of call is quite often the payroll team when an employee is concerned about their tax code, however in line with the HMRC digital strategy HMRC recommend that employees look to their Personal Tax Account in the first instance.
CIPP Policy team value hearing from members about their day to day experiences and look forward to hearing about experience with this latest functionality as it becomes live. Please email us on policy@cipp.org.uk
Thank you
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Welsh rates of Income Tax – technical consultation 24 October 2018
The Welsh rates of Income Tax will be implemented in April 2019 and requires technical changes to legislation. HMRC is looking for feedback on the accuracy of draft legislation and would welcome your views by the end of 5 November.
The Wales Act 2014 introduces the Welsh rates of Income Tax, which will be implemented in April 2019. This requires technical changes to legislation to ensure the new Welsh rates operate as intended, and HMRC has produced a technical note setting out the government’s policy position in areas where the rate setting power interacts with other areas of the Income Tax system.
HMRC would welcome your views on the accuracy of the draft legislation that accompanies the technical note.
This consultation closes at 11:45pm on 5 November 2018.
Given the short consultation window, if you are able to offer your views, please do so directly. All the relevant details can be found through the link below.
Clarifying the scope of the Welsh rates of Income Tax – technical note and draft legislation
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The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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