PAYE12075 - Coding: coding deductions and expenses: underpayment: multiple sources and not liable to tax at primary source

There are cases where you may be able to rearrange an individual’s allowances where the primary source does not have enough income to recover the full underpayment. Do this where

• A secondary source is covered by allowances

And

• Reducing the primary source code will not allow you to recover the underpayment in three years in hardship cases

Transfer enough allowances, from the secondary source to the primary source, to recover the underpayment restriction.

When you arrange to recover an underpayment by this means, write and explain the figures to the individual.

However, if you arrange allowances in this way you may no longer be able to code out all the secondary source income.

Where the secondary source is earnings or an employment pension where you can apply a PAYE code

• Re arrange the allowances

When you have cleared the underpayment review the case. You may again be able to cover a secondary source by allowances.