PAYE Tax Codes From April 2020 for the 2020/2021 Tax Year
PAYE Tax Codes From April 2020 for the 2020/2021 Tax Year

PERSONAL TAX

Three years ago a new form of tax coding was established to help reduce errors and making updates to the way tax is deducted more timely. Dynamic tax coding helped people with irregular pay, multiple income sources such as pensions or multiple jobs, by re-issuing a new updated tax code as the tax year progresses. The Taxman uses a variety of internal and external sources to update its figures and create the tax code, this is the dynamic aspect.

We are currently in unprecedented times with a lot of uncertainty due to the illness spreading across the world and at home in the UK. However, the new tax year - the 2020 tax year still starts next week, and therefore a default tax code is required for calculating tax on income. From April 2020 the new emergency tax code will remain as 1250L and this is because the standard personal tax-free allowance of £12,500 is being retained rather than increased for 2020. Any tax cuts you have heard about are due to the increase to the primary threshold of national insurance contributions, which gives you a little bit of extra income before NICs can be deducted. There isn't a tax code required for NICs.

As usual, Scottish taxpayers will have their tax codes prefixed with an S and in Scotland the allowance also remains frozen, however bands of tax have shifted slightly and you can view these in our tax rates and allowances section.

If you have any issues with your tax code, get in touch with HMRC either by telephone on 0300 200 3300 - or via gov.uk/reporting-your-tax-code-as-wrong - a special section of their website where you can report tax code issues.

Our guide on tax codes has some more information the way tax codes are constructed and how to figure out if you need to report any problems with your tax code.

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