HMRC reveals plans for ‘real-time’ PAYE coding

HM Revenue & Customs (HMRC) has announced it intends to roll out real-time Pay As You Earn (PAYE) coding in time for the 2017/18 tax year.

Coinciding with the launch of Making Tax Digital (MTD), HMRC’s new and improved online tax system, this change will allow taxpayers to react to tax codes instantly so that they can ensure that they are paying the correct amount of tax in real-time.

The tax authority has said that it will use the information it holds and is supplied by employers and pension providers in a “more proactive way”.

According to reports, real-time data usage will enable HMRC to change a customer’s tax code to adjust, correct, or collect any estimated underpayment – meaning that less taxpayers will end the year with an under or overpayment.

HMRC has told employers and pension providers to expect a higher volume of coding notices as a result of the change.

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