Incorrect PAYE coding notices 2010/11

February 3rd 2010

The Institute of Chartered Tax Advisors (CIOT) has had confirmation from HMRC that of the 25 million coding notices being issued for 2010/11 a large number are wrong!  They are now trying to establish exactly how many are wrong and why so many errors have occurred.  The problem was spotted when the HMRC’s new National Insurance and PAYE system (NPS) started issuing PAYE coding notices.

Common errors to look out for

The most common errors, according to the CIOT, are as follows:

• Only one job or private pension, but have received more than one coding notice;
• A coding notice does not refer to a current job;
• Under 65 but the code given is not 647L (or another letter). You may have adjustments to this figure in which case check them carefully;
• A basic rate taxpayer given a D0 code (40%) based on falsely estimated high earnings; and
• More than one job but the free pay allocated to one job is more than the expected income, which would waste some personal allowances.

What to do next?

If you do have clients with incorrect coding notices, you can call the number on the notice or you can call HMRC on 0845 3000 627. 

If you would like some help on this issue please contact us on 0115 983 5580 and we would be happy to assist.