PAYE73015 - PAYE operation: simplified deduction schemes: code change
When you need to change a code
- Complete in full a fresh deduction card P12
- Enter the free pay for each week or month from the Free Pay Tables (Table A) in column 6 and send it to the employer by first class post
- Remind the employer to
- Return the old deduction card P12 to you
And
- Remit the tax shown on it to Banking Operations
Where a K code becomes appropriate
- Reduce the code to 0T and issue a fresh deduction card P12
- Refer the case to your manager to deal with in accordance with ‘K Code Appropriate’ at PAYE73030
Receipt of form P12R
When the employer gets a fresh deduction card P12 with a
revised code he or she sends the old card to their Tax Office. The
Employer section will send a report on form P12R to the PAYE
section showing
- Total pay and tax
- The first and last pay days
The PAYE section must consider what action is needed because
- A non-cumulative system was operated by the employer
- The Tax Office must therefore make any refunds due
If the code was increased a repayment may be due
- To calculate the repayment due use the
- Pay and tax figures for the year to date
- New code
- Cumulative Tax Tables to the last pay day on the old code
- Use COP Function PO to make the repayment
- File the P12R with the claims papers
If the code was reduced you need take no action.
Code revised on change of employment
Following a change of employment to an employer who does not
operate a simplified deduction scheme, you
must review the employee’s code. Wherever
possible the cumulative basis should be restored immediately and
details of pay and tax to date sent to the new employer.
