For over 30 years Richard Edwards Group has been providing excellent advice and a first class service to our clients. We have a large portfolio of clients and service businesses across many sectors. Book one of our FREE INITIAL MEETINGS to start benefiting from our expertise today.

Coding out debts deadline

Source: HM Revenue & Customs | | 11/11/2020

The coding threshold entitles tax payers to have tax underpayments collected via a tax code, provided they are in employment or in receipt of a UK-based pension. The coding applies to certain debts such as Self-Assessment liabilities, tax credit overpayments and outstanding Class 2 NIC contributions.

Instead of paying off debts in a lump sum, money is collected in equal monthly instalments over the tax year.

The amount of debt that can be coded out ranges from £3,000 to £17,000 based on a graduated scale. This is a different limit to that for paying your Self-Assessment bill where the amount owed must be less than £3,000. The maximum coding out allowance only applies to taxpayers with earnings exceeding £90,000. 

The full breakdown is as follows:

Earnings     Coding out limit
Less than £30k £3k
£30k to £39,999.99 £5k
£40k to £49,999.99 £7k
£50k to £59,999.99 £9k
£60k to £69,999.99 £11k
£70k to £79,999.99   £13k
£80k to £89,999.99 £15k
£90k or more £17k

If you had tax underpayments in the 2019-20 tax year you have until 30 December 2020 to file your Self-Assessment returns in order to have the monies collected in the 2021-22 tax year starting on 6 April 2021.



 

Latest News

Tax Diary December 2020/January 2021
25/11/2020 - More...
1 December 2020 - Due date for Corporation Tax payable for the year ended 28 February 2020. 19 December 2020 - PAYE and NIC deductions due for month ended 5 December 2020. (If you

Reasonable excuses for making a late furlough claim
25/11/2020 - More...
HMRC’s guidance on making claims through the Coronavirus Job Retention Scheme was updated on 19 November 2020. The updated guidance now includes various examples of what is meant


Newsletter

With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login