Chapter 3 - 3.6 - Coding Notice Flashcards
1
Q
Why do HMRC issue a tax code?
A
To enable the employer to deduct the correct amount of tax from each employee
2
Q
What does the tax code incorporate?
A
The deductions and allowances available to the individual
3
Q
What two forms does HMRC issue in relation to each employee’s tax code?
A
- Form P2
- Form P9
4
Q
What is form P2?
A
Form P2 is sent to the employee and gives detail of how the PAYE code has been calculated
5
Q
What is form P9?
A
Form P9 is sent to the employer and gives the PAYE code only
6
Q
What does the employer’s payroll software do?
A
Spreads an employee’s allowance evenly over the tax year
