PAYE11035 - Coding: codes: how they are used and calculated: P2 special notes

AGENT

For acknowledgement of information or contact received from tax adviser

We have changed your tax code following information recently provided by your tax adviser.

EMPLOYER

For acknowledgement of information or contact received from employer

We have changed your tax code following information recently provided by your employer.

RETURN

For acknowledgement of information or contact received from the tax return

We have changed your tax code using the information in your tax return.

YOU

For acknowledgement of information or contact received from the customer

We have changed your tax code following information you recently provided.

HUSBAND

For acknowledgement of information or contact received from husband

We have changed your tax code following information recently provided by your husband.

WIFE

For acknowledgement of information or contact received from wife

We have changed your tax code following information recently provided by your wife.

PARTNER

For acknowledgement of information or contact received from partner

We have changed your tax code following information recently provided by your partner.

PARENT

For acknowledgement of information or contact received from parent

We have changed your tax code following information recently provided by your parent.

DAUGHTER

For acknowledgement of information or contact received from daughter

We have changed your tax code following information recently provided by your daughter

SON

For acknowledgement of information or contact received from son

We have changed your tax code following information recently provided by your son

AGENCY

Where the customer is an agency worker

We understand you are working for more than one agency. From now on [EMPLOYER NAME] will use this code number on a special basis to take tax from the payments they make to you. Next year we will tell [EMPLOYER NAME] to use code BR, instead, which means you will pay tax at [BASIC RATE]% on all your [EMPLOYER NAME] income. If you are still working for [EMPLOYER NAME] on 6 April [TAX YEAR END] please contact your main HM Revenue and Customs office and ask them to review your tax.

CAR DISCOUNT

Where the standard note NCAR is present in the customer's code and you add CAR DISCOUNT as a special note.

See also the table of standard notes at PAYE11040 and the explanatory notes for car benefit.

We understand you have now, or previously, had a company car from your employer. You have to pay tax on the benefit of using an employer’s car for your private motoring. By taking into account the

• car’s cost
• carbon dioxide (CO2) emissions value
• fuel type (there are discounts for environmentally friendly cars) 
• number of days the car was available to you
• payments made for the private use of the car

we have worked out the benefit, after taking off the environmentally friendly car discount, to be £ [DEDUCTION VALUE]. If you want to check our figure please contact us or go to www.hmrc.gov.uk/cars. If you think we have got it wrong, please tell us.

NEW CAR

Where car benefit has been coded for the first time

See also the table of standard notes at PAYE11040 and the explanatory notes for car benefit.

(You can also use the CAR DISCOUNT special note with NEW CAR)

We understand you now have a company car from your employer. You have to pay tax on the benefit of using an employer’s car for your private motoring. By taking into account the

• car’s cost
• carbon dioxide (CO2) emissions value
• fuel type (there are discounts for environmentally friendly cars) 
• number of days the car was available to you
• payments made for the private use of the car

we have worked out the benefit to be £ [DEDUCTION VALUE]. (This amount will be higher next year because you will have the use of the car for the full year.) This may mean that between 6 April [TAX YEAR START DATE] and the date [EMPLOYER NAME] used the old code for the last time you will have had the benefit of too much tax free amount, and therefore owe some tax.

If you want to check our figure please contact us or go to www.hmrc.gov.uk/cars. If you think we have got it wrong, please tell us.

CODE ERROR

Where the employer is operating the wrong code.

We believe [EMPLOYER NAME] has been using the wrong tax code, instead of this one, and so insufficient tax may have been taken off their payments to you. Using this tax code now will mean the correct tax is taken off you from now on, but you may owe some tax at the end of the year. (This is because you have had the benefit of too much tax free amount up to now.) We will check and let you know. However, if [EMPLOYER NAME] have used [TAX CODE] (please check your payment advice - the tax code may be shown on them) please let us know.

CUMULATIVE

Where the previous pay and tax figures have been received and the code has been revised to a cumulative basis.

We now have details of your pay and tax from previous employments this year, and we have told [EMPLOYER NAME] that they no longer have to tax you in a special way. [EMPLOYER NAME] will check as soon as possible whether you have paid too much tax this tax year. If you have, you will either pay less tax for a while or they will make you a refund.

DATE OF MARRIAGE

Where a reduced amount of married couple’s allowance has been coded because the customer married during the current year. Add DATE OF MARRIAGE as a special note

Married couple’s allowance is due if either spouse was born before 6 April 1935. It is worth up to £[MARRIED COUPLES ALLOWANCE FULL RATE O75 X 10%] in a full year. Because you married in the year it is worth ([£MARRIED COUPLES ALLOWANCE X 10%] (based on the number of months of your marriage in the tax year) to you. You get the married couple’s allowance of £[MARRIED COUPLES ALLOWANCE X 10%] by having [MARRIED COUPLES ALLOWANCE - ALLOWANCE RESTRICTION]) included in your tax free amount.

EARLIER YEARS ADJUSTMENT

Where the customer has an earlier year's adjustment to be included in their code.

Earlier Years Adjustment Calculation

(Calculation that is displayed in income allowances, benefits and deductions will be reproduced on the P2 where this special note is selected on the Special Notes screen).

EST NIB

If the standard state pension note is present in the customer's code and you add EST NIB as a special note.

We believe you have started to receive the state pension. The pension is taxable but the Department for Work and Pensions, who pay it to you, cannot take tax off the payments they make. We sent you a form asking about your pension but have not had it back yet. So we have estimated that your pension for the full year would be £[DEDUCTION VALUE] (see above). We know you will not receive the full amount this year but we have reduced your tax free amount by that £[DEDUCTION VALUE] and will tell [EMPLOYER NAME] to tax you in a special way. This will mean you are only taxed on the proportion of the pension you will receive in the year - you are taxed on the pension for the number of months or weeks you get it. Please contact us if you would like another pension enquiry form or if you need help with the one we sent you.

NEW NIB

If the standard state pension note is present in the customer's code and you add NEW NIB as a special note.

We know you started to receive a state pension this year. The pension is taxable but the Department for Work and Pensions, who pay it to you, cannot take tax off the payments. We estimate the full pension for this year would be £[DEDUCTION VALUE] (see above). We know you will not receive the full amount this year but we have reduced your tax free amount by that £[DEDUCTION VALUE] and will tell [EMPLOYER NAME] to tax you in a special way. This will mean you are only taxed on the proportion of the pension you will receive in the year - you are taxed on the pension for the number of months or weeks you get it.

NEW BENEFIT

If the standard state pension note is present in the customer's code and you add NEW BENEFIT as a special note.

For example where the state pension descriptor is used for bereavement benefit or carer’s allowance and it is coded for the first time.

We know you started to receive a taxable state benefit this year. The state benefit is taxable but the Department for Work and Pensions, who pay it to you, cannot take tax off the payments. We estimate the full benefit for this year would be £[DEDUCTION VALUE] (see above). We know you will not receive the full amount this year but we have reduced your tax free amount by that £[DEDUCTION VALUE] and will tell [EMPLOYER NAME] to tax you in a special way. This will mean you are only taxed on the proportion of the benefit you will receive in the year - you are taxed on the benefit for the number of months or weeks you get it.

EXPLANATION

Where you need to issue a separate letter to the customer because the P2 notes do not cover the customers specific circumstances, or where we need to provide more detailed information.

We will write to you in more detail about the changes to your tax code.

JSA ESTXXXX

Where you have included a figure of Jobseeker’s allowance in the customers code on a P6.

XXXX is the estimated amount the signal would be input, for example, as JSA EST 1255

We believe you have received Jobseeker’s Allowance in this tax year and we are waiting for figures from the Jobcentre Plus. In the meantime we have included an estimate of [£xxxx] in the figures we have given to [EMPLOYER NAME] so they can tax your pay correctly. If you have actual details of the amounts you received, or if you think our figure is wrong, please contact us.

NOT OP - XXXX.XX

Where you are not issuing the code to the employer and the record is for a non-SA customer.

Where XXXX.XX is the amount of the underpayment.

Your tax code has been reduced to [TAX CODE] but [EMPLOYER] will not be able to use the new code this year. That means you will pay about [£ESTIMATED UNDERPAYMENT] less tax than you should do this year. If you send us your P60 (your employer should give you this by 31 May), we will check the position and will then tell you how we propose to collect the underpaid tax.

NOT OP - XXXX.XX

Where you are not issuing the code to the employer and the record is for a SA customer.

Where XXXX.XX is the amount of the underpayment.

Your tax code has been reduced to [TAX CODE] but [EMPLOYER] will not be able to use the new code this year. That means you will pay about [£ESTIMATED UNDERPAYMENT] less tax than you should do this year. We will check the position when we look at this year’s tax return and we will then let you know how we propose to collect the underpaid tax.

P45 YY

Where you are requesting the customer’s P45 part 1.

Where YY is the last two digits of the start of the tax year.

For example, where you require forms P45 for 2008-2009 year, input P45 08

Please may we have any original P45 “Employee leaving work” certificates given to you by your previous employer(s) in this tax year (from 6 April [TAX YEAR START DATE]).

P60 YY

Where you are requesting the customer’s P60.

Where YY is the last two digits of the end of the tax year.

For example, where you require P60 for 2007-2008 year, input P60 08

Please may we have your original P60 End of Year Certificate for the year to 5 April 20[YY] so we can check your tax position. If you had more than one employer or pension provider at that date, please send all your P60s. If you also received employer benefits, please enclose the benefit statement from your employer (known as form P11D) or the equivalent information.

P91

Where the customer has not returned an employment history form P91.

See the table of automatic notes at PAYE11020.

Please fill in and send back to me your Employment History form (form P91) which was sent to you separately. We will then check whether or not you are paying the right amount of tax. In the meantime, this code number will be used by [EMPLOYER NAME].

P810

Where you are acknowledging the receipt of form P810 and you have changed the customer’s code.

Thank you for completing the “Tax review form”, form P810; we have amended your tax code.

RETURN

Where you have changed a customers code using information on their tax return.

We have changed your tax code using the information in your tax return.

Where one or more of non-PAYE income sources are in the code then this note will automatically be printed on the P2

Commission

Other income (not earnings)

Property income

Savings income taxable at 40 per cent, interest

Without tax taken off (gross interest)

Other earnings

If you prefer to pay the tax due on your [*list the items in code] directly, rather than through your tax code, please let us know. If you do not already complete a Tax Return and choose to pay the tax directly we will start sending you Returns.

*the description of the non-PAYE income item will be included here.