SE71420 - Assessments, appeals and other procedures: coding objections and appeals

Objections and Appeals – General

The procedures for dealing with objections and appeals against coding are in the Employment Procedures Manual (EP).

PAYE is a provisional system of deducting tax from Schedule E income such as wages and salaries by the use of code numbers and tax tables. Where PAYE does not get things right in the tax year matters are sorted out at the year-end either by informal calculation or assessment (see SE71405).

Because PAYE is a provisional system it makes sense to deal with taxpayer enquiries about code numbers as informally as possible. That is why the PAYE regulations give taxpayers initial rights to object to code numbers. If the Revenue do not amend code numbers following objections, taxpayers can then appeal. The Commissioners can consider all matters relevant to a code number and determine what the code number should be. The Commissioners’ decision is final, except on a point of law. Most problems are sorted out at the objection stage, and only a very small number of cases go to the Commissioners in any tax year.

Where the Revenue have notified an employer of a code number, the employer has to use that code number when operating PAYE, even though at that time the coding may be subject to an open objection or appeal.