In order to update an employee's tax code, previous pay and tax during the tax year HMRC issue tax code notices called a P6. These can be set to be applied automatically within the pay run by following the instructions below.
Firstly you need to enable online messages from HMRC by doing the following.
Go to:
https://www.tax.service.gov.uk/business-account/epaye/messages
Enter your Government Gateway user ID and password and choose the "Change how you get tax code and student loan notices" option.
Ensure that all the notices are set to "Yes"
This will now ensure that you will be able to receive online notifications from HMRC.
You will now need to go to Payroll Settings > Business Settings > HMRC Settings and ensure that the 'Tax office details' and the 'RTI settings' have been completed and 'Saved'
N.B. Please ensure that you have selected 'Yes' in the 'Would you like to enable RTI for this business?' option
The 'Payroll ID' and 'National Insurance number' must match to the P6 issued by HMRC in order for the P6 to be applied.
Please also note the effective date on the P6 notice will need to be less than or equal to the date paid of the pay run.
When you create a pay run a warning will be displayed to show tax codes are being applied in the pay run.
When you drill down further this shows both the old and new values being changed. You also have the option to revert this change for an individual or for all employees being changed.
Once you finalise the pay run and go back to the Employees Detail screen you will see that the new tax code has been applied and also note the 'Total pay to date' and 'Total tax to date' fields have been populated.
If required you also have the opportunity to Recheck HMRC notices under the 'Pay Run Actions' button within a pay run.
If you have any comments or suggestions regarding this feature, please leave a message in the comments section below or drop us a line at payroll@biznuspayroll.co.uk