Tax code notifications

We're looking at making tax more straightforward. See what the proposed changes could mean for you.

Proposed

Tax code notifications 

We’re looking at introducing tax code notifications. Here’s an example of what that could mean for someone like Sam.

What's proposed

Sam has two jobs; a gym instructor in the day and working behind a bar at night. Sam uses the same M tax code for both jobs. He didn’t realise he needed to use a different tax code when working two jobs. His employers deduct PAYE every fortnight and both employers use the same tax code, instead of one using a secondary tax code.

Inland Revenue would look at the information provided by Sam’s employers and see that Sam isn’t paying enough tax. Inland Revenue will notify Sam that they will correct his tax code to either a secondary tax code or a tailored tax code, depending on which one suits Sam’s circumstances best. Sam would let one of his employers know that his tax code is changing otherwise he will end up with a bill to pay.

Transcript 

Now

What happens now

Sam has two jobs; a gym instructor in the day and working behind a bar at night. Sam uses the same M tax code for both jobs. He didn’t realise he needed to use a different tax code when working two jobs. His employers deduct PAYE every fortnight and both employers use the same tax code, instead of one using a secondary tax code.

If Sam’s situation is reviewed by Inland Revenue, he may find he is sent a bill to pay at the end of the tax year. This will come as a surprise as he thought he was paying the right amount of tax.