HMRC’s new IT system is continuing to generate widespread 2010/11 PAYE code errors. We have already received multiple Notices of Coding for the same client, in the same envelope. It is going to take some time for them to resolve the situation and it is possible that the errors will not be corrected in time for the start of the new tax year. HMRC’s advice if you think there is a problem with your tax code is as follows:

‘You should check your tax code using the guidance included with the Coding Notice and on our website. If you think that it may be incorrect or if you do not understand an entry on it, please telephone us on the number printed on your Coding Notice or 0845 3000 627 so we can make sure you have the right tax code applied in time for the beginning of the new tax year.’

If you pay your tax late HMRC will charge interest from the date the tax was due until your payment is received.

If you still haven’t paid your balancing payment (due on the 31 January) by 28 February, you may be charged a 5 per cent additional charge, called a surcharge, on top of the amount you still owe. This is in addition to any interest you’ve been asked to pay.

If you still haven’t paid all of the tax due on 31 January by 31 July, you may be charged a second 5 per cent surcharge on top of the amount you still owe.

Doing nothing can become very expensive, so act now.