The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
HMRC collects income tax from around 41 million customers. On average, around 8 million of these customers currently end the tax year having either over or under paid tax. This new system, introduced from 31 May 2017, will offer far more certainty and, for most people, there will be no more waiting for a tax refund or any unexpected bills at the end of the year.
The current system doesn’t always work for customers’ whose circumstances change during the year and can take up to two years for an individual’s tax account to be balanced after an underpayment has occurred.
The vast majority of PAYE taxpayers won’t notice a change. However, millions of customers, who are the lowest paid, will pay less tax on a monthly basis by the end of the tax year because HMRC will catch any overpayments sooner and prevent them from building up. A smaller number of customers, who previously would have had an unexpected bill at the end of the year, will pay the right tax from the moment their circumstances change, so they will be able to manage their tax payments better.
Employers and pension providers could receive more tax codes, but still on a batched basis as now. Regular PAYE RTI submissions will continue unaffected, and it remains critical that employers submit accurate data on time.
If there is a change which affects someone’s tax HMRC will send them a tax code change notice, along with instructions on what to do. This will explain the change, and encourage them to use their online personal tax account where they can view any changes to their tax code, learn more about how their tax code is calculated and access help and support if needed.
Follow this link to read the full briefing from HMRC .
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The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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