Just a cautionary note - the new publication relating to thresholds for tax year 2020-21 includes the 2019-20 tax thresholds and rates for Scotland but figures for 2020-21 have already been published by the Scottish government. The Advisory Fuel Rates are those effective from 1 December 2019, and not the most recently published ones relating to 1 March 2020. HMRC has been notified in relation to these issues and will hopefully update the page in due course.
CIPP comment
The CIPP would welcome unchanged tax thresholds for the tax year 2020-21 since there is such limited time between the delivery date of the Budget and the new tax year. This is in consideration of the gigantic task for software developers ahead should there be any amendments, along with considerable additional work for payroll professionals.
However, with a new chancellor in place, and the prime minister implying that tax changes may be imminent, there are no guarantees at this moment in time in relation to what will happen in tax year 2020-21.
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P9X: Tax Codes 26 February 2020
The 2020 version of P9X (English and Welsh) are now available for employers which confirms the tax codes to change and which to carry forward for the new tax year on 6 April 2020.
Use P9X to find out which PAYE tax codes to change, how to change them and which codes to carry forward ready for the new tax year.
The document confirms that £12,500 will be the basic personal allowance for the whole of the UK (regardless of devolution), and there are no instructions in relation to a general uplift, as the rate remains unchanged from the current tax year. The CIPP would like to remind members that this threshold could still potentially change.
Note that for tax codes, Scottish taxpayers must be prefixed with S and Welsh resident taxpayers with prefix C.
New employees
Where an employee starts between 6 April and 24 May and provides a P45, follow the instructions at www.gov.uk/new- employee.
Where employers have agreed exemptions from online filing and operate a manual payroll, follow the instructions in the RT7, 'Guidance for employers exempt from filing real time information'.
Leavers
Tax codes do not need to be amended for employees leaving prior to 6 April, even if they will receive pay after that point – the old tax code should be used.
Where there is a payment after leaving, once a P45 has been issued, tax code 0T must be operated on a non- cumulative basis. It would be S0T for employees who had an S prefix in their code, or C0T for employees who had a C prefix in their code.
Employees without a new tax code
Copy the authorised tax code from the 2019 to 2020 payroll record and use for 2020 to 2021 tax year, but do not carry forward any ‘week 1’ or ‘month 1’ markings.
Employees with a new tax code
Retain and use the form P9(T) or other tax code notification with the most recent date on for each employee:
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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