From April 2015 HMRC is increasing the amount of overdue tax it can recover through a taxpayer's Pay As You Earn (PAYE) tax code.
Before 6 April 2015 HMRC can collect debts of up to £3,000 by adjusting a taxpayer's PAYE code.
This applies if the taxpayer owes money to HMRC and:
From 6 April 2015 this 'coding out limit' will increase from £3,000 if the taxpayer's PAYE earnings are £30,000 or above. HMRC will apply a sliding scale to the taxpayer's main PAYE income as follows:
|Annual PAYE Earnings||Coding out limit|
|Up to £29,999.99||£3,000|
|£30,000.00 to £39,999.99||£5,000|
|£40,000.00 to £49,999.99||£7,000|
|£50,000.00 to £59,999.99||£9,000|
|£60,000.00 to £69,999.99||£11,000|
|£70,000.00 to £79,999.99||£13,000|
|£80,000.00 to £89,999.99||£15,000|
|£90,000.00 and above||£17,000|
The taxpayer will continue to have the option not to have the debt collected through their PAYE tax code. Then the tax would be payable on the normal due dates.
GOV.UK has information on tax overpayments and underpayments.