PAYE14030 - coding: coding functions: function CD: deductions
This subject is presented as follows
Deductions
Description of deductions on form P2
Deductions
The table shows deductions. The deductions are carried forward to the next year unless stated otherwise. P202 charts are available to help you.
| Deduction | Abbreviation and Notes |
| ALLOWANCE RESTRICTION | HPAR. Used to restrict Married Couple's and associated allowances to 10 per cent. The P2 will not show the restriction, a note will show what MCA is in terms of tax. |
| PART ALLOWANCES ALLOCATED TO SUB SOURCE | AAE. |
| BALANCING CHARGE | BC. The deduction is not carried forward to next year. |
| BASIC RATE RESTRICTION | BRR. In a higher rate case, where the subsource is coded BR, make a BRR restriction at the main source. |
| BENEFICIAL LOAN | BNLN. The cash equivalent of the benefit - the difference between interest at the official rate and any interest actually paid. |
| BENEFITS IN KIND | BIK. Use for benefits other than those listed at PAYE12020. |
| BENEFITS: CAR | NCAR. Use to show the benefit based on the CO2 emissions and price of the car. |
| CAR FUEL BENEFITS | FUEL. See PAYE12020. |
| CHARGES TO BE RETAINED AGAINST PAY | AP. Shown as GIFT AID ADJUSTMENT on P2. The POTA signal is automatically set. Set the TSFX signal where taxable pay is less than the amount of charges. |
| COMMISSION | COMM. |
| EXCESSIVE LOWER RATE
ADJUSTMENT
[In use up to 5 April 2008, not used from 6 April 2008] | ELR. Where there is more than one source of coded income, you may need to make an ELR restriction at the main source. See PAYE13045. |
| EXCESS WIDOWS & ORPHANS RESTRICTION | EWO. See PAYE10035. |
| FORCES PENSION | FP. Set the MCODE signal for the year of commencement. Enter as the reason FP and the date of commencement. |
| FURNISHED LETTING | FL. See PAYE12025. |
| HIGHER RATE ADJUSTMENT | HRA. Shown as HIGHER RATE
ADJ on P2. It may be used
|
| INCOME FROM PROPERTY | IFP. See PAYE12025. |
| MARRIED ALLOWANCE TO WIFE | MAW. This shows the amount of MA transferred under a form 18 election. It will be carried forward automatically until the election is withdrawn or varied. The only amounts that may be entered are one half or the whole of the amount of MA due for the year. The deduction will not trigger a return. |
| MEDICAL EXPENSES | MED. The deduction is carried forward automatically to the next year where there is no entry for CY+1. See also PAYE12020. |
| OTHER EARNED INCOME (NON SCH E) | DEI. Shown as OTHER EARNED INCOME on form P2. |
| OTHER EMOLUMENTS (SCH E) | OE. Shown as OTHER EMOLUMENTS on form P2. |
| OTHER OCCUPATIONAL PENSION | OCCP. |
| OTHER UNEARNED INCOME | DUI. Shown as OTHER INCOME (NOT EARNINGS) on form P2. |
| PART TIME EARNINGS | PTE. |
| PERSONAL PENSION ANNUITY | Use this to code out annuities taxed as PAYE earned income. |
| POTENTIAL UNDERPAYMENT ARISING | PUP. Although not a deduction, it must be entered in the DEDNS field. It is not carried forward to next year but recovered in coding under UPC for next year. The computer calculates the underpayment at the appropriate rate of liability (unless the taxpayer is a Jobseekers Allowance claimant - this will be dealt with by the Benefit Office). |
| PUBLIC SERVICE PENSION | PSP. Set the MCODE signal for the year of commencement. Enter as the reason PSP and the date of commencement. |
| STATE PENSIONS / BENEFIT CODED | NIB. The amount coded out may be different from the actual benefits received in the year. See also PAYE13030. |
| TAXABLE EXPENSES PAYMENT | TEP. This includes taxable profits from car allowances paid to employees of Local Authorities, the National Health Service and others for the use of employees' own cars (fixed profit car schemes). |
| TELEPHONE EXPENSES PAYMENTS | PHON. The deduction is carried forward automatically to the next year where there is no entry for CY+1. Use MOPH for mobile telephones. See also PAYE12020. |
| TIPS | TIPS. See PAYE12025. |
| UNDERPAYMENT CODED | UPC. The deduction is not carried forward to next year. The computer calculates the amount of underpayment to be coded. Actual and potential underpayments coded are shown under one total. |
| UNDERPAYMENT RESTRICTION | UPR. The deduction is not carried forward to next year. The computer calculates the restriction at the appropriate rate of liability. |
| UNTAXED INTEREST | INT. |
| VAN | VAN. The deduction is carried forward automatically to the next year where there is no entry for CY+1. See also PAYE12020. |
Description of deductions on form P2
The table tells you
The abbreviations to be entered on the coding record What the
computer prints on the form P2
| Abbreviation | P2 Description |
| AAE | OTHER EARNINGS (OR PENSION) |
| AP | GIFT AID ADJUSTMENT |
| AUB | ESTIMATED JOBSEEKERS ALLOWANCE |
| BC | BALANCING CHARGE |
| BIK | EMPLOYER BENEFITS |
| BNLN | LOAN FROM YOUR EMPLOYER |
| BRR | ADJUSTMENT TO 22% RATE BAND |
| NCAR | CAR BENEFITS |
| COMM | COMMISSION |
| DEI | OTHER EARNINGS |
| DUI | OTHER INCOME (NOT EARNINGS) |
| ELR | ADJUSTMENT TO 10% RATE BAND |
| EWO | WIDOWS & ORPHANS ADJUSTMENT |
| FL | PROPERTY INCOME |
| FP | FORCES PENSION |
| FUEL | CAR FUEL BENEFIT |
| HRA | SAVINGS INCOME TAXABLE AT 40% |
| IB | TAXABLE INCAPACITY BENEFIT |
| IFP | PROPERTY INCOME |
| INT | INTEREST WITHOUT TAX TAKEN OFF (GROSS INTEREST) |
| MAW | MARRIED COUPLE'S ALLOWANCE TO YOUR WIFE |
| MED | MEDICAL INSURANCE |
| NIB | YOUR STATE PENSION/STATE BENEFITS |
| OCCP | OTHER PENSION |
| OE | OTHER EARNINGS |
| PHON | TELEPHONE |
| PPA | ANNUITY |
| PSP | PUBLIC SERVICE PENSION |
| PTE | PART TIME EARNINGS |
| PUP | SPECIAL NOTE WILL BE ADDED TO P2 |
| TEP | TAXABLE EXPENSES PAYMENTS |
| TIPS | TIPS |
| UPC | REDUCTION TO COLLECT UNPAID TAX £ [TAX UNPAID] |
| VAN | VAN BENEFIT |
