What Is the Process for Implementing Tax Code Changes from HMRC?

Tax code changes from HMRC are processed automatically through our software, but there are specific procedures we must follow to ensure compliance.

⚖️ Important: Tax Codes Are Between Employee and HMRC

Tax codes are fundamentally a matter between the employee and HMRC - not the employer's responsibility

We can only action official tax codes that HMRC communicates to us as the payroll provider

Employers are not responsible for determining if an employee's tax code is correct

Our job is to keep you compliant by using only officially issued tax codes

🔐 HMRC Authorisation Required

We must be authorised to receive tax codes electronically from HMRC

This authorisation is set up during implementation before your first payroll

It's the employer's responsibility to ensure we have this authorisation

Without it, we cannot receive automatic tax code updates

⚡ How Tax Code Changes Are Processed

Electronic Notices (Most Common):

• Tax codes update automatically in our system
• Changes are applied to the next payroll run
• No action required from you

Postal Notices (Rare):

• HMRC occasionally sends tax code changes by post to your business address
• Forward these to us immediately via the secure portal
• We'll apply the changes manually

📞 When Employees Query Their Tax Codes

If an employee believes their tax code is incorrect:

This is their responsibility to resolve with HMRC directly:

• Phone: 0300 200 3300
• Online: Update your tax code on GOV.UK
• They should request the new tax code (if there is one) to be sent to their employer/payroll provider. HMRC will normally do this automatically.

What employers should NOT do:

• Try to determine if a tax code is correct
• Request manual changes based on employee complaints
• Take responsibility for tax code accuracy

⚠️ Common Tax Code Misconceptions

"Employee sees different code on HMRC app":

• The HMRC app doesn't constitute an official notice to employers
• We must wait for official communication from HMRC
• Electronic notices can take 24-48 hours to reach our system

"Employee thinks tax code is wrong":

• This is between the employee and HMRC
• Employee must contact HMRC to resolve
• They should provide your PAYE reference when calling
• Request HMRC resend official notice if needed

🛠️ Manual Tax Code Changes (Not Recommended)

In exceptional circumstances, we can manually change a tax code if:

You request it in writing

You sign a waiver accepting full liability for any tax discrepancies

Warning: This puts the employer at risk for incorrect tax calculations

📋 Our Responsibilities

Process all official tax code notices from HMRC

Maintain records of when changes are applied

Keep you compliant by using only authorised tax codes

Not our responsibility: Determining tax code accuracy or resolving employee disputes

Need help understanding tax code processes or have questions about official notices?

👉 Contact us here for detailed support and written responses.