David Howard Direct Payments blog

Are your employees on the right tax code?

Written by admin | Apr 6, 2020 3:29:19 PM

Are your employee’s on the right tax code?

If your employee believes that they are paying the incorrect amount of tax on their earnings the below information may help clear somethings up for you:

Tax is payable based on earnings, regardless of age!

This means that it doesn’t matter if you are 16 or 99 years old, you will still pay tax if you earn over the threshold.

If Payroll have not been provided with sufficient information regarding an employee’s tax code, the employee will be processed with no personal allowance (0T tax code) following HMRC guidelines – This means that the employee will receive no tax free allowance on their salary.

If an employee has more than one job, they may be issued with the basic rate tax code (BR) on one of their employments – This means that on the employment that is operating the BR tax code the employee will pay tax on everything they earn, and their tax free pay will be operated on the other employment.

If your employee believes they are on the wrong tax code, or if their circumstances have changed, then they can contact HMRC and request that they review their tax code  and potential split the code between this and any other incomes that your employee may have (i.e. other jobs, pension, benefits etc.).

HMRC Contact Number: 0300 200 3300

Outside UK: +44 135 535 9022

This is not a decision that can be made by dhPayroll, and we will need to wait until HMRC have sent us a notification to change your employee’s tax code before we can update it.

Any tax that has been paid that wasn’t due to be paid, will be returned to the employee through the payroll as a tax refund.

HMRC offer lots of helpful advice on employee tax codes, which can be found on the following link: https://www.gov.uk/tax-codes