Tips

Payroll

Updating your employees’ tax codes

From the 2022/23 tax year, the personal tax allowance remains at £12,570.  This means that the emergency tax code remains at 1257L and you don’t need to update employees’ tax codes

However, if you receive a P9 or P6 from HMRC, you will need to update an individual employees tax code.  You should clear any week 1/month 1 flags for the employees too.

Tip:  There are no separate increases for Scottish and Welsh tax codes.

Update an employee’s tax code

There are different steps depending on how HMRC contacted you, you will either get a letter through the post, or an IR Secure Mailbox notification.

Received a letter

1. Select the required employee and click the Employment
2. In the tax code box, enter the tax code HMRC have stated.
3. Click Save.

IR Secure Mailbox Notification

1. Click E-submission, then click IR Secure Mailbox.
2. Select P9
3. Click Apply.

The employee tax code will now be updated and you can clear the week 1/month 1 flag.

Clear the week 1/month 1 flag

1. Select the required employees.
2. Click Tasks then click Global Changes.
3. Click Tax Codes then click Clear W1/M1 flag.
4. Click Yes then click OK.

If you would like help updating your employees tax codes, clearing week 1/month 1 flag(s) or need any other help or advice with your payroll please contact us

 We can also provide a remote access service where we can directly link into your computer to help you resolve your Sage Accounts or Payroll problems.