CHECKING YOUR HMRC PAYE NOTICE OF CODING

Published 26 July 2022
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Many people receive their PAYE coding notice from HMRC without checking that its right.  Your PAYE coding rules how much tax is deducted and influences what pay you take home at the end of each week or month.
 
Your tax code is normally issued at the start of each new tax year and lets you know how it is made up.  The code takes into consideration any overpaid tax you have from the previous year,  company benefits, expenses and tax free personal allowances you are entitled to.
 
It is up to you to check your notice and it is in your interest to do so.  Even if you don’t receive a new notice it is worth checking how your code is made up.    You can also write to HMRC and ask for a breakdown on how they have calculated your code.  You are responsible for checking your code and you could be under or overpaying tax if it is not correct.  If you feel that your code is not correct you must notify HMRC.
 
What the letters mean:-

0T
From all income there is no personal allowance
When an employee has not given you a P45 or enough details to work out their tax code, or when their Personal Allowance has been used up

BR
From all income at the basic rate
For a second job or pension

D0
From all income at the higher rate
For a second job or pension

D1
From all income at the additional rate
For a second job or pension

L
At basic, higher and additional rates depending on the amount of taxable income
For an employee entitled to the standard tax-free Personal allowance

M
At basic, higher and additional rates depending on the amount of taxable income
For an employee whose spouse or civil partner has transferred some of their personal allowance

N
At basic, higher and additional rates depending on the amount of taxable income
For an employee who has transferred some of their Personal allowance to their spouse or civil partner

T
At basic, higher and additional rates depending on the amount of taxable income
When HMRC needs to review some items with the employee
 
Sometimes tax codes may feel like a minefield to decipher.  If you are confused about whether your tax code is correct please get in touch with us and we will be happy to help you.

Tel:  01254 300050
Email:  info@mayesaccountants.co.uk