New PAYE coding notices
HMRC have confirmed that they have started sending out 2011/12 PAYE coding notices to taxpayers. The forms contain taxpayers’ tax codes for the tax year beginning 6 April 2011. The notices will be sent to taxpayers by HMRC during January, February and March of this year.
Coding notices are intended to ensure that taxpayers pay the right amount of tax. They should contain reference to all relevant allowances and reliefs and ensure that all income sources have been taken into account. Coding notices should always be checked carefully that the information is correct as the codings will be used by employers and pension providers.
HMRC expect this year’s annual coding process to run more smoothly than in 2010 as they have put in place a number of IT fixes and carried out clerical reviews. Tests show a significant improvement but only time will tell.