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Tuesday
Mar162010

HMRC Suggests Individuals Confirm Their Income Tax Coding Notice

I was chatting to a friend just yesterday about his tax coding notice that he received a couple of weeks ago. He mentioned that his tax coding band had changed since last year and was now incorrect i.e. if he did nothing, he would stand to pay additional tax that he did not have to pay. We decided to look into the matter a little further.

Searching the web, I found an article on the HM Revenues & Customs website that mentions they have had an issue with their new National Insurance and PAYE Service. Apparently they’ve introduced a new computer system that will streamline processes and is being used to issue tax coding notices for the 2010/11 tax year. As with many new IT systems they’ve found a couple of glitches.

The new system has issued several (no admission on the actual number) incorrect tax code notices. The good news is that HMRC have realised there is a problem and have conducted their own internal audit to find out where incorrect notices have been issued. If you have received a new tax coding notice and it’s incorrect, HMRC will likely have already contacted you or will be doing so very soon.

Like my friend, if you have received a new tax coding notice and think that the new banding is incorrect, you should act on it to make sure you don’t end up paying too much tax in the new financial year. Leaving it until the new tax year, won’t be the end of the world but it will mean you could end up paying more tax initially than you need to.

Advisors here at St Matthew will be able to help you work out which tax code banding you should be in and work with you to get HMRC to change the tax code banding if there is an error.

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