PAYE

HMRC is now issuing the 2016/17 PAYE notices of coding. Around 11 million taxpayers will receive a PAYE coding notice (P2) with an insert directing them to gov.uk/taxcodehelp.

This will enable them to see details online of their coding for 2016/17 and is designed to encourage people to use their Personal Tax Account. This also details The Online Payrolling Benefits in Kind Registration Service which is available to employers, enabling them to payroll benefits and expenses.

The PAYE codes, which are to take effect from 6 April 2016, incorporate adjustments for both the new Personal Savings Allowance and the new rates of dividend tax.

We are already hearing reports that the codes include adjustments for investment income and higher rate tax despite the fact that the taxpayer has previously opted not to have any such adjustments made through the code number.

One problem with the new system is that the Personal Tax Account and the Online Payrolling Benefits-in-kind Service are not currently designed for use by tax agents (usually your accountant). Agents are asked not to try to access Personal Tax Accounts on behalf of a client, because anyone logging in using another person’s credentials will potentially raise a security alert.

The full text of HMRC’s update is reproduced below.

Our professional body makes the point to HMRC, at every possible opportunity that it is imperative that agents can see and do everything that their clients can, at the same time as their clients. This is not currently the case. They have been given assurances that client and agent access will be synchronised and they will continue to push hard on this issue.

If you think your code incorrectly includes adjustments for both the new rates of dividend tax and the personal savings allowance, you can contact HMRC and arrange to have these removed or you can use the online form 2016-17 Tax code – structured email to suggest an amendment to a notice of coding.

HMRC’s update – full text

“We wish to provide an update to you on the Personal Tax Account, and the Payrolling Benefits in Kind service on which you may receive enquires from your members.

“Since its launch in December there has been a major increase in the number of individual customers using their personal tax account. On some days during January between 40,000 and 50,000 new users were accessing their accounts for the first time.

“Because of the success in introducing unrepresented non-business SA customers to their personal tax account, more customers are now being encouraged to use this online service. Agents may wish to be aware that between now and mid-March 2016 around 11 million customers will receive a PAYE code notice (P2) with an insert directing them to https://www.gov.uk/taxcodehelp. This will provide them with further information about personal tax accounts where they’ll now be able to see online their coding for 2016-17, and consider how their code, allocation of allowances, and estimates of income compare to 2015-16.

“A separate online service is also available enabling employers to payroll certain benefits and expenses, removing the requirement to report these on a P11D at the end of the tax year. Customers interested in this service have to register via a new Online Payrolling Benefits in Kind Registration Service, advising HMRC of the benefits and expenses they intend to payroll or are already payrolling.

“The Personal Tax Account and Online Payrolling Benefits In Kind Service are not currently designed for use by agents. HMRC continues to develop online services for agents through Agent Online Self-Serve (AOSS). AOSS is being developed with input from agents to ensure that services best meet agents’ needs. Agents who meet the criteria will be invited to take part in the AOSS private beta service over the coming months. Updates on AOSS and digital support for agents will be provided through regular briefings to stakeholders and posts on the HMRC Tax Agent Blog.

“Agents should not try to access personal tax accounts on behalf of a client. Anyone logging in (whether an agent or other person) using another customers’ credentials will potentially raise a security alert. Safeguards are built into our systems to protect our customers online and if an alert is triggered, this may impact on the progress of submitting a client’s return and delay any repayment due. It is therefore vitally important that agents set up correct client authorisation to access clients’ accounts.”

Noel Guilford, Principal at Guilford Accounting
Noel Guilford is the principal of Guilford Accounting a small business accountancy practice specialising in advising owner-managed businesses on current accounting, finance, and tax matters. You can reach him via email at noel@guilfordaccounting.co.uk or by phone at 01244 660866. He is the author of the 'Figure it out - an entrepreneurs guide to understanding your business numbers' which you can obtain by visiting guilfordaccounting.co.uk.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ His latest book, How to Build a Successful Business' will be published in 2018.

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