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Understanding Tax Code Changes
Understanding Tax Code Changes
Michael Colley avatar
Written by Michael Colley
Updated over 8 months ago

First, it is important to note that Onfolk is not responsible for selecting or changing tax codes.

We just receive and process automated notifications from HMRC. These notifications contain the tax codes that have been assigned to your employees.

When we receive these notifications, we use the tax codes to calculate the tax exposure for each employee. This means that any changes to the tax code will directly affect the amount of tax that is deducted from their paychecks.

Why did this tax code change?

If you are wondering why a certain tax code change has occurred, the best course of action would be to contact HMRC directly. As an employer, you can call HMRC on behalf of your employees to inquire about the reason for the change. Alternatively, your employees can also contact HMRC themselves for more information.

How do I know that what I see in Onfolk is correct?

To make it easy, we show you the notifications that we receive from HMRC in the app. Simply go to Settings > Payroll > PAYE Messages to see the notifications. The Onfolk team will never override what we receive from HMRC with regards to tax codes at the risk of making employees pay more tax than they are due to pay.

I received a letter from HMRC but the tax code hasn't changed in Onfolk

If you received a letter from HMRC but the change hasn't reflected in Onfolk then it might be because you don't have automated notices set up on your HMRC account. Read Automate your taax code notices to set this up.

Can I override the tax code for an employee

Yes, you can, just bear in mind that it will have an impact on their tax so we recommend setting up the automated reminders and having HMRC and Onfolk take care of the tax code changes. Again, if you disagree with a certain tax code or want to understand why it's been applied you should reach out to HMRC directly as soon as possible.

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