HMRC set to tell bosses about tax code changes

Later this week, the bosses of small businesses across the UK will receive information about what they need to do to prepare for the tax code changes that will take place when the basic Personal Allowance is increased later this year.

In the May Budget, the chancellor revealed that the basic Personal Allowance would be increased by £600 from £5,435 to £6,035 and that the basic rate limit would drop from £36,000 to £34,800.

These changes are due to come into effect in September. HM Revenue & Customs explained that this meant that bosses needed to start using new tax codes and rate bands from the first payday on or after September 7th.

As a result, HMRC is writing to owners explaining that they need to make sure that every employee has a P11 Deductions Working Sheet. What's more, bosses should start changing their existing tax codes following the last payday on or before September 6th.

Bernadette Kenny, the director general of personal tax at HMRC, explained: "This letter includes some really useful information for employers.

"We are also updating our website so that all the relevant tools, tables and guidance that employers use will be at their finger tips come September."