Difference between revisions of "How do I change a tax code?"

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== Summary ==
 
== Summary ==
 
This article will explain how to alter employee tax codes within the Payroll system.
 
This article will explain how to alter employee tax codes within the Payroll system.
  
 
== More Information ==
 
== More Information ==
You may receive '''P9(T)''' notification of changes to employee tax codes. If so check from when they are effective and wait until you are in that payroll period before making the changes. You will not necessarily receive notifications for all employees. For those without '''P9(T)''' notifications:
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At the start of the tax year employees on an {{DataValue|L}} code will require an increase their current tax code by the notified amount ''(e.g. 1185L becomes 1235L when the notified amount is 50)''. This is done by using the "Global Tax Code Change" part of the system.
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Individual notifications should be sent to you by HMRC in the form of an email or '''P6''' form. Check from when they are effective and wait until you are in that payroll period before making the changes.  
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{{Warning|text=Towards the end of the tax year you may receive notifications to be used from period 1 of the new tax year. Do not enter these changes until you move in to the new tax year, unless directed to use the code immediately.}}
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You can also log in to PAYE Online to view tax code changes for your employees.
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For further more detailed information please refer to the [https://www.gov.uk/employee-tax-codes HMRC website].
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{{Warning|text=Tax Code Changes should be made in the period they are to be effective from and not before.}}
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=== Multiple Tax Code Changes ===
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{{Information|text=This option is usually only used at the start of a tax year.}}
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{{Warning|text=The following instructions should be done '''BEFORE''' entering any individual tax code changes. For any employee for whom you have received a P6, their tax code '''MUST''' be checked and changed to match the form.}}
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* Go to {{PayrollSettings|Global Tax Code Changes}}.
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* Select the suffix you wish to change e.g. {{Example|text={{DataValue|L}}.}}
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* Enter the amount you wish to raise it by in the {{DataPrompt|Allow.}} column.
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* Press {{KeyPress|F2}} to view the proposed changes.
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* All employees will be tagged as standard. This can be left as is or you can untag certain employees by pressing {{KeyPress|U}} e.g. {{Example|text=The ones with an individual tax code notice.}}
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* Press {{KeyPress|F2}} to finalise the changes.
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* Press {{Button|Tagged}} to confirm the change or press {{Button|Cancel}} to abort the changes.
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=== Individual Tax Code Changes ===
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{{Information|text=This option should be used to make individual tax code changes at the start of the tax year or when notified of a change during the tax year.}}
  
For any employees on an {{DataValue|L}} code, increase their current tax code by the notified amount ''(e.g. 1100L becomes 1150L when the notified amount is 50)'' This is done by using the "Global Tax Code Change" part of the system.
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* Go to {{Menu|{{PR}}|Run Payroll Period}}.
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* Select the correct pay period from the selection.
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{{Example|text={{DataValue|Monthly}} or {{DataValue|Weekly}}.}}
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* Move to the employee in question.
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* Press {{KeyPress|S-F10}}.
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* Select the {{Tab|Tax, NI and Pension}} tab.
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* Amend the {{DataPrompt|Tax Code}} and confirm the change.
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* Press {{KeyPress|ESC}} and {{Button|Accept}} to complete the change.
  
To change the tax codes you will need to:
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=== Week 1/Month 1 ===
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An emergency tax code is only classed as such if followed by ‘W1’, ‘M1’ or ‘X’. Emergency codes can be used if a new employee doesn’t have a P45 but you should always follow HMRC guidance when you employ a [https://www.gov.uk/new-employee new employee].
  
Go to {{PayrollSettings|Global Tax Code Change}}.
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At the start of a new tax year, unless notified otherwise, ensure that {{DataPrompt|Week/Month 1}} is set to {{DataValue|No}} for each employee.
* In the {{DataPrompt|Allow:}} column of the {{DataPrompt|L}} code line of the tax code screen enter {{DataValue|50}} to increase ALL '''L''' codes by '''50'''.
 
* Press {{KeyPress|F2}}.
 
* This will show you a range screen showing all codes and the changes to be made check them over and make sure you are happy with the amounts.
 
* It is possible to ''Tag'' and ''Untag'' the various employees if you wish to not update their particular Tax Code at this moment in time.
 
* Press {{KeyPress|F7}} to alter the '''Effective Date'''. Just over type the Date that is in there.
 
* Press {{KeyPress|ESC}}.
 
* When Happy with the changes Press {{KeyPress|F2}} to process the Tax Code Changes.
 
  
 
== See also ==
 
== See also ==
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* [[Payroll End of Year]]
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* [[How to amend your Payroll Tax Bands]]
 
* [[How do I run a payroll period?]]
 
* [[How do I run a payroll period?]]
 
* [[Entering P45 Details/New Starters]]
 
* [[Entering P45 Details/New Starters]]
* [[How do I Change an NI Number?]]
 
* [[How do I Set Up Payroll Adjustments?]]
 
* [[How do I Set up Payroll Attachments?]]
 
* [[How can I View my P9(T) Documents?]]
 
  
{{KB_Tags|tax, band, changes, global}}
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{{KB_Tags|tax code, tax, code, payroll, end of year, raise L codes, P6, new starter, P45, P46, new employee, procedure, year end, end of year}}
{{FAQ}}{{KB_PR}}{{ZN_Admin}}
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{{Guide}}{{Hint}}{{KB_PR}}{{ZN_Admin}}

Revision as of 04:31, 27 February 2019

Summary

This article will explain how to alter employee tax codes within the Payroll system.

More Information

At the start of the tax year employees on an 'L' code will require an increase their current tax code by the notified amount (e.g. 1185L becomes 1235L when the notified amount is 50). This is done by using the "Global Tax Code Change" part of the system.

Individual notifications should be sent to you by HMRC in the form of an email or P6 form. Check from when they are effective and wait until you are in that payroll period before making the changes.

Towards the end of the tax year you may receive notifications to be used from period 1 of the new tax year. Do not enter these changes until you move in to the new tax year, unless directed to use the code immediately.

You can also log in to PAYE Online to view tax code changes for your employees.

For further more detailed information please refer to the HMRC website.

Tax Code Changes should be made in the period they are to be effective from and not before.

Multiple Tax Code Changes

This option is usually only used at the start of a tax year.
The following instructions should be done BEFORE entering any individual tax code changes. For any employee for whom you have received a P6, their tax code MUST be checked and changed to match the form.
  • Go to " Payroll Maintenance Options Payroll Settings Global Tax Code Changes".
  • Select the suffix you wish to change e.g.
    'L'.
  • Enter the amount you wish to raise it by in the "Allow." column.
  • Press <F2> to view the proposed changes.
  • All employees will be tagged as standard. This can be left as is or you can untag certain employees by pressing <U> e.g.
    The ones with an individual tax code notice.
  • Press <F2> to finalise the changes.
  • Press [Tagged] to confirm the change or press [Cancel] to abort the changes.

Individual Tax Code Changes

This option should be used to make individual tax code changes at the start of the tax year or when notified of a change during the tax year.
  • Go to " Payroll Run Payroll Period".
  • Select the correct pay period from the selection.
'Monthly' or 'Weekly'.
  • Move to the employee in question.
  • Press <Shift+F10>.
  • Select the [Tax, NI and Pension] tab.
  • Amend the "Tax Code" and confirm the change.
  • Press <Esc> and [Accept] to complete the change.

Week 1/Month 1

An emergency tax code is only classed as such if followed by ‘W1’, ‘M1’ or ‘X’. Emergency codes can be used if a new employee doesn’t have a P45 but you should always follow HMRC guidance when you employ a new employee.

At the start of a new tax year, unless notified otherwise, ensure that "Week/Month 1" is set to 'No' for each employee.

See also


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Keywords AND Misspellings
tax code, tax, code, payroll, end of year, raise L codes, P6, new starter, P45, P46, new employee, procedure, year end, end of year