HMRC have either made another I.T. error or have deliberatlety changed the policy of collecting tax under PAYE. In the past if your code changed, and it meant paying more tax, they would put you on a “Month 1” basis which meant that you only paid the increase from the month of change.

Today we have received batches of tax code changes for two payroll clients that means that back tax will be collected from the 6th April onwards.

At the moment we are only 2 months into the tax year but if the policy remains the same, come next March you could have the situation that a whole year’s back tax would be collected from one months pay rather than coded out over a full twelve months.

Heads will roll over this one.