If your company has electronic tax status updates switched on, tax updates, including tax codes and student loan notices automatically pull in from HMRC. If you’ve not chosen to also turn on Auto-apply, you’ll need to manually accept or reject any tax updates for team members as you receive them.
View tax updates
To check tax updates for team members in a company:
Click the company’s Payroll tab, then click Current period.
If there are any updates from HMRC, they’re highlighted with a count against the Get tax updates button.
To view the updates, click Get Tax updates.
Alternatively:
On Current Period, click Alerts.
Against the Tax Updates alert, click Review updates.
This shows you a list of the tax updates pulled in from HMRC.
Accept and reject tax updates
Once in your tax updates, you can begin accepting and rejecting the tax updates. By default, they’ll all be set to Accept, but if for any reason you need to reject the updates, switch the toggle against the relevant update. For tax updates that you’re rejecting, you’ll also need to add a reason for rejection from the dropdown list.
Once you’ve configured all updates, click Accept updates.
Validate tax updates
To pull a tax code into Paycircle from HMRC, you need to validate the data HMRC are sending against the data stored in Paycircle. Paycircle follows the below rules when applying tax code updates to employees:
Even minor discrepancies, such as differences in spacing, capitalization, or character formatting, can prevent updates from being applied.
If National Insurance Number matches, Surname matches and HMRC ID matches – the tax code update applies.
If National Insurance Number matches, Surname doesn’t match, and HMRC ID matches – the tax code update applies.
If National Insurance Number matches, Surname matches, HMRC ID doesn’t match – the tax code update applies.
If National Insurance Number matches, Surname doesn’t match, HMRC ID doesn’t match – the tax code doesn’t apply.
If National Insurance Number doesn’t match, Surname matches, HMRC ID matches – the tax code doesn’t apply.
If National Insurance Number doesn’t match, Surname doesn't match, HMRC ID matches - the tax code doesn’t apply.
If National Insurance Number doesn’t match, Surname matches, HMRC ID doesn't match - the tax code doesn’t apply.
If National Insurance Number doesn't exist in HMRC and/or Paycircle, Surname matches, HMRC ID matches - the tax code update applies.
If National Insurance Number doesn't exist in HMRC and/or Paycircle, Surname doesn't match, HMRC ID matches - the tax code doesn’t apply.
If National Insurance Number doesn't exist in HMRC and/or Paycircle, Surname matches, HMRC ID doesn't match - the tax code doesn’t apply. Ensure that employee records in Paycircle contain accurate NINO, surname, and HMRC ID to facilitate updates.
Effective Date Prioritisation for Multiple Notices
When Paycircle receives multiple tax code notices, it applies updates based on the effective date HMRC specifies. Paycircle prioritises notices with earlier effective dates over those with later effective dates, regardless of when they are received.
Clarification on HMRC ID vs Payroll ID
The HMRC ID in Paycircle must match the HMRC ID held by HMRC for tax code updates to apply. However, the Payroll ID is a separate identifier and does not need to match the HMRC ID.