{"id":24565,"date":"2023-03-13T09:32:39","date_gmt":"2023-03-13T09:32:39","guid":{"rendered":"https:\/\/smh.group\/?p=24565"},"modified":"2023-03-13T09:32:39","modified_gmt":"2023-03-13T09:32:39","slug":"importance-of-tax-codes-why-you-should-pay-attention","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/importance-of-tax-codes-why-you-should-pay-attention\/","title":{"rendered":"Importance of Tax Codes: Why You Should Pay Attention"},"content":{"rendered":"<p><strong>Most directors and employees will already have been issued a tax code for the 2023\/24 tax year, and it is important to check the figures as a very large proportion of codes will be incorrect. If you\u2019ve been subject to an error, this could mean a future corrective tax bill.<\/strong><\/p>\n<h2><strong>Common errors<\/strong><\/h2>\n<p>A tax code will typically take into account allowances, allowable expenses, taxable benefits (those not payrolled) and untaxed income, so there is plenty of scope for error.<\/p>\n<ul>\n<li><strong>Allowances:<\/strong> The code can often assume the incorrect level of income when it comes to the amount of available personal allowance.<\/li>\n<li><strong>Allowable expenses:<\/strong> Deductions for subscriptions and professional fees will be based on what was claimed previously, yet these will invariably increase annually.<\/li>\n<li><strong>Taxable benefits:<\/strong> For most benefits, HMRC will be unaware of any changes from the previous year.<\/li>\n<li><strong>Untaxed income:<\/strong> Figures for bank and building society interest can be too high where, for example, an account has been closed.<\/li>\n<\/ul>\n<h2><strong>Emergency codes<\/strong><\/h2>\n<p>A particular problem can be the use of an emergency code. These can be applied if there is a change in circumstances, such as:<\/p>\n<ul>\n<li>A new job;<\/li>\n<li>Taking on an additional part-time job; or<\/li>\n<li>Starting employment after being self-employed.<\/li>\n<\/ul>\n<p>The emergency code is used because HMRC will often not receive the employee\u2019s income details in time after the change. Although use of the code is temporary, it can cause a cashflow problem for the employee.<\/p>\n<p>Those starting a new job should give the new employer their P45 as soon as possible. Those moving from self-employment should complete the starter checklist.<\/p>\n<h2><strong>Checking and correcting codes<\/strong><\/h2>\n<p>The easiest way a person can check and correct a tax code is by logging onto their personal tax account using their Government Gateway user ID and password. HMRC can be notified of any changes that affect the tax code, and employer details can be updated.<\/p>\n<p>The starting point for checking or correcting a 2023\/24 tax code can be found <a href=\"https:\/\/www.gov.uk\/check-income-tax-current-year\" target=\"_blank\" rel=\"noopener\"><span style=\"text-decoration: underline;\"><strong>here<\/strong><\/span><\/a>.<\/p>\n<p>Contact your account manager or reach out to us on <strong>0114 266 4432<\/strong> or <a href=\"mailto:info@smh.group\"><strong>info@smh.group<\/strong><\/a> to discuss this in more detail.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Most directors and employees will already have been issued a tax code for the 2023\/24 tax year, and it is important to check the figures as a very large proportion of codes will be incorrect. If you\u2019ve been subject to an error, this could mean a future corrective tax bill.<\/p>\n","protected":false},"author":4,"featured_media":18788,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[3],"tags":[83,98,11,21,242],"class_list":["post-24565","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-smh-accounting-business-advisory","tag-chartered-accountants","tag-financial-advice","tag-hmrc","tag-income-tax","tag-tax-code"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Importance of Tax Codes: Why You Should Pay Attention - Accountants in Sheffield - SMH Group<\/title>\n<meta name=\"description\" content=\"Most directors and employees will already have been issued a tax code for the 2023\/24 tax year, and it is important to check the figures as a very large proportion of codes will be incorrect. 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