When to Change Your Tax Code: A Guide for Taxpayers

Tax codes are an important part of the tax system, and it's important to understand when and why your tax code may change. In most cases, HMRC (Her Majesty's Revenue and Customs) will automatically update your tax code when your income changes, such as when you start a new job, receive a pension, or receive taxable benefits. Your tax code can also be modified if there is a change in your tax-free income, or if you donate money to a charity or contribute to a private pension. Your circumstances may change during the fiscal year, so HMRC can modify your tax code at any time and send you a new PAYE coding notice.

It's important to keep all your coding notices to verify that HMRC has calculated your tax code correctly and that your employer is using the correct tax code for you. If you are a non-resident professional with income or benefits that are taxable in Hong Kong, you must report it to the Department of Internal Revenue. If the amount of the basic personal allowance changes every year, HMRC and your employer (or pension provider) can update your tax code automatically by referring to the code letter “L”, without HMRC having to contact you. Your employer also needs to know your employment history for the current tax year, so that you use the correct tax code.

Non-resident artists and athletes are taxed in the name of the person in Hong Kong (the Hong Kong payer) who pays or credits the sums to that artist or athlete or their agent. If you donate money to a charity or contribute to a private pension, your tax code can be adjusted to reflect a greater amount of tax-free income. You can check your tax code for the current tax year, as well as for the previous and next year, using your personal login details. If your spouse or domestic partner has transferred part of their personal allowance to you using the marriage allowance, you can find it at the end of your tax code.

It is used for Scottish taxpayers in a similar way to the BR code described above for taxpayers in the rest of the United Kingdom, but will only apply when income is projected to be lower than the Scottish intermediate rate. These notes are intended to help you check your tax code, but the way tax rules work means that this isn't always simple. For payments to private or business pension plans, you get a tax break with the highest rate of income tax you pay. If the inclusion of this estimated underpayment for the current fiscal year causes you financial difficulties, you should contact HMRC as soon as possible and ask them to remove it from your code number. It's important to complete the new initial checklist as accurately as possible, or you may end up paying too much or too little in taxes. For example, if someone earns 3,000 pounds sterling per month, she pays taxes on the first 3,142 pounds each month at 20% (which means a tax of 628.40 pounds sterling), and the remaining 858 pounds at 40% (which means a tax of 343.20 pounds sterling).

Therefore, if you are taxable and have not received a tax return, you must write to the IRD (Inland Revenue Department) to obtain a tax return within 4 months after the end of the base period of the evaluation year in question.

Jacob Macdonnell
Jacob Macdonnell

Incurable zombieaholic. Passionate beer maven. Zombie trailblazer. Hipster-friendly coffee fanatic. Infuriatingly humble foodaholic.