HM Revenue & Customs has made changes to the Pay as You Earn (PAYE) tax system.
As of this month (May 2017), HMRC will update tax codes as soon as they are informed of any changes affecting a person’s tax, whether that be from an employer or pension provider.
Previously HMRC has calculated tax that people are owed, or need to pay back, at the end of each tax year (April 5th).
“These changes mean that people won’t pay or receive a repayment of any tax at the end of each tax year,” said Peter Way-Rider, tax manager at Ellis & Co.
“Instead they will pay tax as soon as there are any alterations to their tax code, resulting in more tax being taken from earnings than normal.
“HMRC has brought these changes in so that people pay the right amount of tax at the right time, and not left with a bill at the end of each tax year.
“If these changes result in financial hardship, a tax payer still has the right to approach HMRC and request that the outstanding tax be paid over a period of time,” he added.
For advice on the Pay as You Earn tax system, or any other tax issues, contact Peter Way-Rider on 01244 343504.