With lots of new employees in September, HR Connect wanted to share that the HMRC have recently created a new tool >> to assist your employees with understanding their tax code, including what the tax code means and how it will impact on their pay.
Using the employee’s tax code, which will be present on their payslip, the tool >> will estimate the amount of tax expected to be deducted from pay and an explanation of what tax code means.
To use the tool >> you or your employee will need to answer some simple questions such as:
• Which country you live in
• Is your tax code BR, D0, D1, 0T, NT or other
• If other, does it start with a K
• The numbers of the tax code
• The suffix letter
• If the code has W1, M1 or X at the end
• Estimated annual income.
It is key to note that this is a tool to estimate tax deductions and might not be a true representation, this is because a tax code can be cumulative or non cumulative (meaning that it is calculated over the whole tax year or on a monthly basis respectively) and tax code updates from HMRC can applied during a pay month. Therefore this tool should only be used as a guide and employees should contact HMRC directly if they believe their tax code is wrong.
If your employee believes the tax code is correct but incorrect deductions have been made from pay and you are an HR Connect customer, our helpdesk will be happy to assist you to resolve this.
Send this link or blog post to your employees to encourage them to use the new tool >> when starting employment with you, or if their tax code has changed recently.