2010-11 PAYE tax code errors
As has been widely reported many of the 2010-11 tax codes recently issued contain errors. HMRC have now issued a warning to employers and employees about the situation which relates to the introduction of the new National insurance and PAYE Service (NPS). Following the amalgamation of data from different systems last year the NPS has generated tax coding notices for the first time.
Employees and pensioners should be aware that HMRC have identified areas where there may be errors in the data held by the NPS. These errors usually arise where multiple or incorrect coding notices have been sent to taxpayers. An internal HMRC review is underway to identify cases where there may be errors and to seek to ensure that discrepancies are fixed prior to the start of the 2010-11 tax year. Taxpayers who believe they may have been issued with an incorrect coding notice should contact their advisers or HMRC as soon as possible.
There are also similar issues with coding notices which have been sent to employers, pension providers and agents. HMRC will not be issuing P9 forms for individuals whom HMRC feel are most at risk of receiving an incorrect code. Employers who do not receive a P9 for an employee or pensioner should continue to use the existing code number for 2010/11.
HMRC have also published a list of the main reasons for the data mismatches.