PAYE is changing from May 2017

An Improvement to Pay As You Earn (PAYE)

As part of the preparation for Making Tax Digital, from the end of May 2017 HMRC will use real time information from employers and pension providers to make adjustments to taxpayers’ PAYE codes throughout the year.

Taxpayers with employment or pension income should therefore pay the right amount of tax on this income during the year that it is received. There should then be no need to wait until the end of a tax year to make a tax repayment claim or establish any underpayment of tax on this type of income, as any under or overpayment of tax will automatically be adjusted for. This will also reduce the need for PAYE code adjustments at the beginning of the following tax year.

HMRC are encouraging taxpayers to take control of their personal tax. This can be done by accessing their Personal Tax Account and gaining instant access to their tax information. The benefit of using this service is that all HMRC information is in the one place and available to see at any time of day. Once a Personal Tax Account is in place taxpayers will be in a position to:-

• Claim a tax refund
• Claim tax relief on expenses
• Check their PAYE code
• Check their Income tax position
• See their State Pension forecast
• See their National Insurance Record
• Manage Tax Credits and Child Benefit
• Notify a change of address
• Apply for Marriage Allowance

To access your online Personal Tax Account go to www.gov.uk/personaltaxaccount and sign in using your Government Gateway ID and password. If you need to set up a Government Gateway account you will need your NI number, a telephone number as well as either a P60, payslip or passport details.

Please note that HMRC have advised that tax agents, such as ourselves, will not be able to access the necessary information from clients’ Personal Tax Accounts until later on this year. Please therefore make sure that you let us see copies of any revised PAYE codes that are issued to you so that we can check these and confirm that they are correct. Please also let us know if you do make any changes to your tax affairs via your Personal Tax Account.

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