How Automatic Adjustments to PAYE is changing Payroll Processing

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Introduction of automatic adjustments to PAYE – what it means for businesses and employees

In May 2017  the HMRC introduce the use of real time information to make automatic adjustments to Pay As You Earn (PAYE) tax codes as they happen, rather than waiting until the end of the tax year. This should provide more certainty, reduce unexpected tax bills and ensure more PAYE customers end the tax year having paid the right amount of tax.

How will it affect your employees?

The vast majority of PAYE customers will have no action to take. For them it will mean they will end the year having paid the right amount of tax. It’s estimated that, in the UK, up to 5,000,000 customers will pay less tax on a monthly basis and pay the correct amount by the end of the tax year.

There are some PAYE customers who, because they owe underpaid tax, will need to pay that tax throughout the year, rather than at the end of the year. All PAYE customers will receive tax code notices that clearly explain the changes and what they can do if they need help and support to manage their taxes.

What this means for businesses

On June 1st 2017, the HMRC will put the change into effect and commence sending employees’ tax code notifications at the point that their circumstances have changed. The HMRC will continue to send a copy direct to employees and send the notifications to employers, as they currently do now.

In the short-term, businesses may receive some employee enquiries relating to tax code changes as customers get used to the change. Longer-term, however, businesses should experience reduced contact from employees regarding under or overpayments of tax.

Support available

PAYE customers should refer to their online Personal Tax Account for further details and support. This is where PAYE customers can view any changes to their tax code, learn more about how their tax code is calculated and claim or settle any over or under paid tax. Help and support features are also available.

Employers should direct UK employees to:


PaycheckPlus UK and Irish Payroll Providers

Here at PaycheckPlus we strive to make businesses be the best employers that they can be. On top of ensuing employees are paid on time, every time, we provide support that helps employees increase their take-home pay by providing tax credit advice. In addition to this we can provide an employee assist helpline which allows businesses to offer comprehensive employee support.

To become the best employer that you can be contact PaycheckPlus today.

For information and assistance on processing payroll for employees, call +44 (0) 161 464 8720 or Request a Quote from our Payroll Specialists today.

PaycheckPlus – Payroll Excellence