PAYE13120 - Coding: coding: general principles: penal indicator
Where a targeted review form (P810) has been issued but not logged as received, the Penal indicator is automatically set on the record. Recording the receipt of the form will result in automatic cancellation of the Penal indicator (PAYE79061) (before December 2010 the penal indicator was also set when the 575 and R40 was issued).
The presence of the Penal indicator does not prevent the granting of any allowance in coding and there is no justification for withholding an allowance properly claimed and found to be due because a review form, or the information asked on it, is outstanding.
The bulk issue of the P810 has not taken place since April 2008. Form P810 can now only be issued online. The online issue of the form P810 does set the penal code indicator for CY+1.
What will happen at annual coding?
The Penal indicator will have been automatically set where an online targeted review form (P810) has been issued but not logged as received. Annual Coding Main Review will then withdraw certain allowances and increase certain deductions by a set percentage, whether or not the item was the reason for the issue of the review form
- Allowances to be withdrawn. Any of the following allowances present in the coding record for CY+1 will be withdrawn
- Gift aid payments
- Job expenses
- Loan Interest
- Higher rate tax relief on pension payments
- Professional subscriptions
- Payments towards a retirement annuity
- Deductions to be increased. Any of the following deductions present in the coding record for CY+1 will be increased by the percentages shown
- Commission 50
- Other earned income 50
- Other earnings (Not earnings) 50
- Income from property 50
- Untaxed interest 50
- Other earnings (Earned income) 50
- Part time earnings 50
- Tips 50
- Occupational pension 10
- Personal pension annuity 10
Annual Business Guidance Notes (BGN) will tell you if these percentages change.