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Coding changes through personal tax accounts

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HMRC has issued a briefing note outlining how, from the end of May, it will start to use real time PAYE information already held within its systems to calculate in-year whether individuals are paying the correct amount of tax. Where a change of tax code is necessary, HMRC will send a tax code change notice explaining the change and encouraging the taxpayer to use their online personal tax account.

For those unable or unwilling to use the online personal tax account, HMRC will continue to provide telephone support and home visits where appropriate.

HMRC acknowledges that the new system could mean employers and pension providers will see an increased number of revised tax codes from May 2017, although these will be sent in batches, as at present.

These changes formed part of the consultation process on making tax digital, which ran between August and November 2016.