Employees who receive bonuses or one-off payments are being encouraged to check their personal tax accounts (PTAs) to prevent HMRC’s systems from interpreting these as recurring payments.
The Institute of Chartered Accountants in England and Wales (ICAEW) has recommended that employees take this action because most payroll software does not contain a facility to tell HMRC that a payment is a one-off.
The Institute warned that employees who receive one-off payments might be given the wrong code and, as a result, should check the estimated employment income figures on their PTAs and correct them if necessary.
The call follows the introduction of HMRC’s Dynamic Pay As You Earn (PAYE) Coding system. This is issuing tax code changes more frequently to increase the number of employees who pay the right amount of tax via PAYE during the year.
