LITRG highlights impact of PAYE dynamic coding

Released 10 October 2017

Dynamic coding of tax underpaid may lead to a sudden drop in take home pay for some taxpayers.

The Low Incomes Tax Reform Group (LITRG) has published an online news article highlighting that the new Pay As You Earn (PAYE) ‘dynamic coding’ system will mean some individuals may have tax owed collected over a much shorter period, in some cases, as little as a couple of months. Under ‘dynamic coding’ tax owed for a tax year which would previously have been collected over 12-36 months will now be automatically coded out over the remainder of the tax year in which it comes to light in most cases. The LITRG is recommending taxpayers check their coding notices carefully and if a sudden drop in income as a result of a coding change to collect an underpayment causes financial difficulty to contact HMRC straight away.

View the news article If your take home pay or pension has reduced, check your tax code.

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