11 Aug Coding out debts deadline
The coding threshold entitles taxpayers to have tax underpayments collected via their tax code, provided they are in employment or in receipt of a UK-based pension. The coding adjustment recovers debts such as self-assessment liabilities, tax credit overpayments and outstanding Class 2 NIC contributions. Instead of paying off amounts outstanding as a lump sum, money is collected in monthly instalments over a full tax year.
The amount of debt that can be coded out ranges from £3,000 to £17,000 based on a graduated scale. The maximum coding out allowance only applies to taxpayers with earnings exceeding £90,000.
The full breakdown is copied below:
|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|
Taxpayers with underpayments in the tax year 2015-16 have until 30 December 2016 (as opposed to the normal 31 January deadline for electronic returns) to file their self-assessment returns in order to have the monies collected in the 2017-18 tax year starting on 6 April 2017.