What is a PAYE tax code notice of coding?

A notice of coding is issued by HMRC and states your current tax code as calculated by HMRC.

A PAYE notice of coding is also known as a form P2 and is usually posted at the start of each tax year by HMRC. The P2 notice of coding provides an explanation of what your current tax code is and the reason as to why you have that tax code.

The notice of coding has an explanation of how your tax code has been made up by HMRC and will include any job expenses for example professional fees, flat rate expenses related to your job, and company benefits.

Other reasons can affect your tax code such as underpaying tax in a previous tax year or having a company benefit like a company car.

Always check your form P2

It is important to double check that the tax code stated on your notice of coding is correct and that all of the information on your notice of coding is accurate. It’s ultimately your responsibility to check that your tax code is right with HMRC expecting you to tell them if it is wrong.

If you have not received a PAYE notice of coding form P2 and would like a breakdown of how your tax code has been calculated you can request a copy from HMRC (aka the tax office).

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