More powers proposed for HMRC giving them 30 days to tell you of a change to your tax code.
Having an incorrect tax code can mean you either pay too much tax or too little – so it’s important.
Under current regulations HMRC tells taxpayers about any change to their tax code immediately, therefore personal finances can be budgeted accordingly. HMRC are proposing additional powers which would mean they would have 30 days to inform you of a change to your code.
The difference this could make to ‘take home’ pay could easily derail any worker’s budget and also means that it could take a month to check that the newly assigned tax code is correct. As over 5 million workers are currently dealing with errors in the P.A.Y.E. system, a further consequence may be one of trying to rectify subsequent over or under payment issues.
As reported in The Telegraph, tax experts Baker Tilly said that taxpayers would be “effectively lending to the taxman out of their salaries”.
Parliament will make a decision on this proposal later this year. They have already granted HMRC the additional ability to take money directly from taxpayers’ bank accounts.
What HMRC are saying
According to their spokesman, “HMRC anticipates savings for the taxpayer of several millions of pounds in printing and postage costs, as a result of these changes”. They also said that this new power to withhold tax code information is only designed to be used around busy times of the year, such as around the deadline for self assessment. They justified it further by saying that employees can request their tax code earlier for their own financial planning and that employers will still be informed of any changes straightaway.
Income tax codes
Tax codes are important to anyone who is employed and it’s always worth checking the accuracy of your own. Our free income tax code guide can help you work out what your tax code should be and what to do if you think it’s wrong.
