Managing Incorrect Tax Codes for Employees in FreePayroll
Navigating tax code discrepancies in FreePayroll is straightforward once you're familiar with the process. Understanding why these discrepancies might occur and how to address them ensures accurate payroll management.
If an employee informs you of a tax code change that hasn't been reflected in FreePayroll, immediately update it in the system, by accessing the employee details.
If an employee receives a P6/P9 notice indicating a tax code change, it's your obligation to implement this new code. HMRC doesn't provide reasons for these changes, so if an employee queries their new tax code, they should be directed to contact HMRC directly here.
For new employees who submit their P45 after their first payroll has been processed:
- If the P45 is current for the tax year, update the tax code in FreePayroll to match the P45, unless an HMRC-issued code has been received beforehand. HMRC-issued tax codes take precedence.
It's essential to stay vigilant for tax code updates and ensure all payroll information is current and correct. Regular communication with your employees about providing timely updates on their tax situation can help maintain accuracy in their payroll records.
Addressing Tax Code Changes
When an Employee Notifies You of a Tax Code Change
If an employee informs you of a tax code change that hasn't been reflected in FreePayroll, immediately update it in the system, by accessing the employee details.
Reasons Behind Tax Code Changes
If an employee receives a P6/P9 notice indicating a tax code change, it's your obligation to implement this new code. HMRC doesn't provide reasons for these changes, so if an employee queries their new tax code, they should be directed to contact HMRC directly here.
New Employees Providing P45 After First Payroll Run
For new employees who submit their P45 after their first payroll has been processed:
- If the P45 is current for the tax year, update the tax code in FreePayroll to match the P45, unless an HMRC-issued code has been received beforehand. HMRC-issued tax codes take precedence.
Maintaining Accuracy
It's essential to stay vigilant for tax code updates and ensure all payroll information is current and correct. Regular communication with your employees about providing timely updates on their tax situation can help maintain accuracy in their payroll records.
Updated on: 28/04/2024
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