Coding out debts deadline

November Budget cancelled
October 25, 2019
Tax Diary November/December 2019
October 31, 2019

Coding out debts deadline

You can have tax underpayments collected via an adjustment to your PAYE tax code, provided you are in employment or in receipt of a UK-based pension. The coding adjustment applies to certain debts such as Self-Assessment liabilities, tax credit overpayments and outstanding Class 2 NIC contributions.

Instead of paying off debts in a lump sum, money is collected in equal monthly instalments over a tax year.

The amount of debt that can be coded out ranges from £3,000 to £17,000 based on a graduated scale. This is a different limit to that for paying your Self-Assessment bill where the amount owed must be less than £3,000. The maximum coding out allowance only applies to taxpayers with earnings exceeding £90,000.

The full breakdown is as follows:

Earnings Coding out limit
Less than £30k     £3k
£30k to £39,999.99 £5k
£40k to £49,999.99 £7k
£50k to £59,999.99 £9k
£60k to £69,999.99 £11k
£70k to £79,999.99 £13k
£80k to £89,999.99 £15k
£90k or more £17k

If you had tax underpayments in the 2018-19 tax year, you have until 30 December 2019 to file your Self-Assessment returns in order to have the monies collected in the 2020-21 tax year – starting on 6 April 2020.

If you need help organising the payment of your tax bill – to be paid off by an adjustment to your tax code – call now as the December deadline is fast approaching.

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Coding out debts deadline

The coding threshold entitles taxpayers to have tax underpayments collected via their tax code, provided they are in employment or in receipt of a UK-based pension. The coding process applies to certain debts such as Self-Assessment liabilities, tax credit overpayments and outstanding Class 2 NIC contributions. Instead of paying off debts in a lump sum, money is collected in equal monthly instalments over the tax year.

The amount of debt that can be coded out ranges from £3,000 to £17,000 based on a graduated scale. This is a different limit to that for paying your Self Assessment bill where the amount owed must be less than £3,000. The maximum coding out allowance only applies to taxpayers with earnings exceeding £90,000.

The full breakdown is as follows:

Earnings Coding out limit
Less than £30k    £3k
£30k to £39,999.99    £5k
£40k to £49,999.99    £7k
£50k to £59,999.99    £9k
£60k to £69,999.99 £11k
£70k to £79,999.99 £13k
£80k to £89,999.99  £15k
£90k or more    £17k

Taxpayers with underpayments in the tax year 2017-18, have until 30 December 2018 to file their Self-Assessment returns in order to have the monies collected in the 2019-20 tax year starting on 6 April 2019.

Comments are closed.