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You will receive a tax code when you start a new job or receive a pension. When you start your first job, you won’t have a form P45 as this is given to you by your employer when you stop working for them. This allows your new employer to decide which tax code to operate against your earnings, you will be asked to complete a form P46.

There are three options for you to decide from on this form; option A which is for anyone who is starting their first job since 6th April that year and hasn’t received a taxable benefit during that time. Option B is for anyone who has either had a job since 6th April or received taxable benefits in that time. Option C is to declare that you have another job or a state or occupational pension.

If there are any changes to your circumstances that may affect your income, you must inform HMRC as this can affect your tax code. Any changes which aren’t reported could result in the wrong amount of tax being deducted.

Following an amendment of your tax code, HMRC will send you a copy on a form P2. Some changes that may affect your tax code include a married couple where one person was born before 6th April 1935; you start to receive income from another source, like a second or third job or a pension, or if the amount of any untaxed income alters. A new source of income or starting to receive a company benefit will also generate a new tax code.

About The Author

Gary Fields

Content Writer working alongside our expert accountants to bring you the latest Tax and Accounting news.

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