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Before the start of the new tax year, HM Revenue & Customs (HMRC) may send you updates containing new tax codes and tax and National Insurance tables to use from 6 April.
To ensure that your employees pay the right tax from the start of the year you'll need to set up new P11 Deductions Working Sheets (or equivalent payroll records) for them and apply these new updates and codes.
HMRC may send you additional updates after the Budget - you'll normally need to apply these from mid May.
This guide provides an overview of what updates to expect and when and what action you'll need to take.
On this page:
Updated PAYE calculators and tax tables must be used from 6 April 2011. Income Tax rates and bandwidths are shown in the table below.
| Rate | % | Bandwidth |
|---|---|---|
| Basic Rate | 20% | £1 to £35,000 |
| Higher Rate | 40% | £35,001 to £150,000 |
| Additional Rate | 50% | £150,001 and above |
The new threshold (starting point) for PAYE is £144 per week (£623 per month). The new emergency code is 747L.
If you use payroll software you must ensure it reflects the changes applicable from 6 April 2011. Details of the changes are given on form P9X (2011).
Download P9X Tax codes to use from 6 April 2011
At the start of the tax year you'll need to set up a new form P11 or equivalent record (either electronic or paper) for every employee who'll be working for you in the coming tax year and for whom any of the following applies:
Taking on a new employee - first steps
HMRC strongly recommends that you keep electronic rather than paper-based payroll records. Using software saves you time, reduces errors and makes it easier to file PAYE forms online - a significant advantage because almost all employers and pension payers are required to file their in-year starter and leaver information and their Employer Annual Return (P35 and P14s) online.
You can keep electronic payroll records using either commercial payroll software (some of which is free) or HMRC's free P11 Calculator. You'll find the P11 Calculator within HMRC's Basic PAYE Tools package - it's very important to make sure you're using the latest version as this will include the most recent PAYE updates from HMRC.
Using commercial payroll software or HMRC’s downloadable P11 Calculator
If you still maintain paper payroll records you can order your forms P11 online.
Order copies of form P11 online
If you use commercial payroll software your supplier should automatically send you updates that incorporate these changes. It's important to make sure you get these software updates.
If you use the interactive P11 Calculator contained within the Basic PAYE Tools package, HMRC will notify you of the required update. Again, it’s important to download this update - the software will do everything for you.
If you use the manual tables, either as a paper or electronic copy, you will need to ensure that you use the correct tables. In January or February HMRC will normally publish new tax and National Insurance tables to use from 6 April - these include any changes that were announced during the last tax year.
If you are continuing to operate a manual payroll there is an alternative to the manual tables. There are some easy to use calculators available to help you to complete your form P11 Deductions Working Sheets(s). You can find a list of all of the payroll tools for employers by following the link below.
If you require a paper copy of the tables please help HMRC to save paper and costs by printing off the table you require. The tables are available in an easy print format by following the link below. If you do not have internet access you can order paper copies from HMRC's Employer Orderline.
Download or order tax/National Insurance tables
Increasingly, HMRC sends tax code notices online to employers. It will start sending them online as soon as you register for its 'PAYE Online for employers' service - which most employers must do in order to meet the requirement to file their in-year starter and leaver information and Employer Annual Return online.
There are two ways of accessing the tax codes that HMRC sends online. You can:
If you have registered for the 'PAYE Online for Employers' service you can opt out of receiving your tax code notices online, although HMRC would encourage you not to do so.
Using HMRC’s PAYE Desktop Viewer
You'll need to update your employees' tax codes before the first pay day of the new tax year. The sections below outline the various forms that HMRC uses to tell you about new tax codes, and explain how to use these codes to make sure your payroll calculations are correct.
The form P9X ‘Tax codes to use from 6 April’ gives details of any generic changes to your employees' tax codes. These changes are normally made because new tax rates, thresholds or allowances are coming into effect and will affect the amount of tax you'll need to deduct from your employees' pay from 6 April.
For employees for whom you haven't received a form P9(T) and for whom you don't have an unused P6 (see later sections):
If you have received a form P9(T) for an employee, or you have an unused P6 for them which arrived too late to use, follow the guidelines in the sections below.
For some employees HMRC may also send you form P9(T) ‘Notice to employer of employee's tax code’. This shows a revised tax code for the following tax year. You won't get a new individual tax code for every employee - only if individual adjustments are needed to their tax code.
If you get a form P9(T) for an employee, you must:
Where, exceptionally, you receive a P9(T) or other tax code notification significantly later than the date from which it is to be applied contact your tax office for confirmation of the code to be used.
If you received an in-year tax code change for an employee on form P6 but it arrived too late to use it in the last year, carry forward this code instead for the new tax year and follow the P9X instructions.
Download P9X Tax codes to use from 6 April 2011
Using commercial payroll software or HMRC's P11 Calculator contained within the Basic PAYE Tools package makes dealing with new tax codes quick and simple. You simply enter the new tax code - from form P9(T) or by following the P9X instructions - on to each individual employee's record. Do this after you have finalised the records for the previous tax year.
As long as you're using the updated version of your software or the Basic PAYE Tools package it will automatically work out for you the new tax and NICs you need to deduct from your employee’s pay. There's no need for you to refer to any tax and National Insurance tables. But do make sure you're using the latest version.
A set of Basic PAYE Tools are now available to download straight to your computer. In addition to the P11 Calculator, the tools include:
Download Basic PAYE Tools (Opens new window) from the Business Link website
If you’re still using paper methods to maintain your payroll records, you'll need to copy the tax code from form P9(T) into box L on your paper form P11. If you haven't received a P9(T) for the employee, follow the instructions on form P9X instead.
You can then calculate the tax and NICs either with:
Whether you’re using the tax and NICs tables or calculators, make sure you use the latest version. If you use an outdated version your figures will be wrong.
If you're still keeping paper payroll records it's worth considering switching to electronic methods (commercial payroll software - some of which is free - or HMRC’s free P11 Calculator, as described in the previous section). These work everything out for you automatically and will both save you time and reduce error.
Keeping electronic payroll records also makes it easier for you to file your PAYE forms online. This is a significant advantage over paper-based record keeping as almost all employers and pension payers are required to file their in-year starter and leaver information and their Employer Annual Return (P35 and P14s) online. Read the related guidance below to find out more about filing online.
How to get started with PAYE online filing
Download or order tax/National Insurance tables
There are special rules about which tax code to use if an employee starts work near the start of the tax year and gives you a form P45. Read the related guide below for the detail.
Using the right tax code - taking on a new employee with form P45
There are sometimes changes to make to your employees' records after the start of the new tax year as a result of the Chancellor's spring Budget statement. If so, HMRC will send you an update on form P7X and will provide any necessary updates to your Basic PAYE Tools. You'll need to follow the instructions on form P7X and apply these changes from the date HMRC informs you of.
For example the changes may include:
It's important to destroy any earlier versions of tables and guidance you may have. If you use paper-based methods you can download new versions or get them from the Employer Orderline.
Download or order Taxable Pay Tables
You might also find HMRC’s Employer Helpbook E11, ‘Starting the tax year’ helpful - download a copy using the link below.
Download Employer Helpbook E11, 'Starting the tax year' (PDF 284K)
If you still can't find what you're looking for, send HMRC an email and they'll reply within two working days.
Send HMRC an email about starting the tax year
Alternatively you can call HMRC’s Employer Helpline.
Find contact details for HMRC’s Employer Helpline
If you want to communicate with HMRC in the Welsh language you can email your contact details through this website and an adviser will call you to deal with your query about starting the tax year. Alternatively you can call the Welsh Contact Centre.
Send an email to the Welsh Contact Centre
Find contact details for the Welsh Contact Centre
