Tax Adjustments

Enter your tax adjustments and balances on this page.

Option Description
Underpaid tax for earlier years included in tax code for <current year> This is the total amount of unpaid tax from earlier years which has been included in the client's PAYE code for the currently selected tax year. HMRC may have told the client the figure to use here via a Notice of Coding.
Underpaid tax for <current year> included in your tax code for <next year> This is the total amount of unpaid tax from the currently selected tax year that has been included in the client's PAYE code for the next tax year.
Increase in tax due because of adjustments to an earlier year

This is the additional tax due arising from transactions in the current tax year which affect the tax due for an earlier year, such as:

  • they claimed farmers' averaging which increased their income for the last year.
  • they claimed backwards spreading of literary or artistic income which increased their income for the last year and possibly the year before as well.
  • they claimed to carry back post-cessation receipts to the year that their business ceased, thus increasing their income in that year.

You need to work out the client's underpayment of tax by reference to the tax rates and circumstances for the earlier year. Recalculate the liability for that year, taking account of the adjustment. The difference between the recalculated figure and the original figure is the amount of tax still due.
Decrease in tax due because of adjustments to an earlier year This is the decrease in tax due arising from transactions in the current year which affect the tax due for an earlier year.
Do not collect any tax due for <current year> via PAYE If the amount of tax that the client owes is less than £3,000, this may be collected through the client's PAYE code. Only tick this box if the client does not want the underpayment collecting through the PAYE code.
Do not collect Child Benefit Charge or tax on income other than employed earnings or pensions for <next year> via PAYE Only tick this box if you do not want the PAYE code to be used to collect tax on the High Income Child Benefit Charge and/ or non-PAYE income.
Client is liable to make Student Loan Repayments Tick this box if your client is liable to make Student Loan Repayments in the tax year. If your client is an employee with payments deducted through PAYE, then see also Interest-free / low-interest loans or arrangements.