Tax Code Changes
Friday, August 29th, 2008From September 2008 tax codes for many employees are going to change. The personal allowance (free pay) in 2008/09 for people under 65 will increase from £5435 to £6035. This means that employees are now able to earn £116 per week or £503 per month before tax and N.I. are applied. The new emergency tax code will be 603L. HM Revenue & Customs (HMRC) will be sending out a revised Employer CD-ROM; 2008 (August), which will include updated tools for calculating payroll. If you use a payroll system, you should be sent an update in August. If you have not received the update yet, contact your payroll provider.
The new tax codes must be used from the first payday on or after 7th September 2008. The table below (taken from HMRC website) shows the changes that will need to be made to your employees’ tax codes.
|
Type of tax code |
Action |
|
L suffix |
Add 60 to the existing tax code number. For example, old tax code 543L becomes 603L. This should be changed without waiting for a P6 notice.
|
|
T suffix |
Only change the tax code when we send you a P6 notice.
|
|
P, V or Y suffix |
Do not change these tax codes unless we send you a P6 notice.
|
|
A or H suffix |
These are no longer used so contact your HM Revenue & Customs office immediately if you have any of these tax codes.
|
|
NT, BR or D0 |
Do not change these tax codes unless we send you a P6 notice.
|
|
K prefix |
Only change the tax code when we send you a P6 notice.
|
More information can be found on HMRC website: http://www.hmrc.gov.uk/employers/epa-basicrate.htm
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