For 2021 to 2022 the basic Personal Allowance will be £12,570 for the whole of the UK.
The threshold (starting point) for PAYE is £242 per week (£1,048 per month). The emergency code is 1257L for all employees.
Get ready for the new tax year starting on 6 April
For each employee who will be working for you on 6 April you’ll need to:
• prepare a payroll record
• identify the correct tax code (including the correct prefix i.e. ‘S’ or ‘C’)
• enter the correct tax code on the payroll record
Tax code changes-
Add 7 to any tax code ending in L, for
example, 1250L becomes 1257L.
Add 8 to any tax code ending in M.
Add 6 to any tax code ending in N
When HMRC do issue a new tax code for any of your employees, you’ll receive one of the following:
• a paper form P9(T), ‘Notice to employer of employee’s tax code’
• an internet notification of coding if you’re registered to use our PAYE Online – internet service
To access your online coding notices:
• go to www.gov.uk/paye-online-log-in and select ‘Sign in’
• from the Business tax account home page, select ‘Messages’ and then select ‘PAYE for employers messages’
• select ‘View your Tax Code Notices’
• from the ‘Tax Year’ drop down box select the new tax year (2021 to 2022)
What you need to do before 6 April 2021
Employees without a new tax code
Copy the authorised tax code from the 2020 to 2021 payroll record and continue
to use for 2021 to 2022.
Do not copy or carry over any ‘week 1’ or ‘month 1’ markings.
Tax code changes-
Add 7 to any tax code ending in L, for
example, 1250L becomes 1257L.
Add 8 to any tax code ending in M.
Add 6 to any tax code ending in N
The payroll records for these employees are now ready for the new tax year.
Employees with a new tax code
Keep and use the form P9(T) or other tax code notification with the most recent date on for each employee:
• scrap any form P9(T) or other tax code notification for the same employee with an earlier date
• copy the tax code from the form P9(T) or other tax code notification onto your payroll record
• update any tax codes where you’ve received form P9(T) or other tax code notification after you’ve set up your payroll records
The payroll records for these employees are now ready for the new tax year.
Employees leaving
You do not need to change the tax code for any employee who leaves before 6 April, even if you’ll be paying them after 6 April.
Just use the old tax code.
This does not apply to payments after leaving when you’ve already given an employee a P45. In these circumstances tax must be deducted using tax code 0T, S0T for employees who had an S prefix in their code or C0T for employees who had a C prefix in their code, on a non-cumulative basis.
