The main purpose of the P9X form is to allow HMRC to advise employers which tax codes should be incremented for the start of the following tax year. It contains thresholds, rates and tax code increases for both employers and payroll providers, ensuring they have everything they need for their payroll records and tax codes for the following tax year.
How this now affects Scotland
For decades now, Scotland has lobbied to have full control of their own budget. Last year, the government decided that they could have the funds from employees living in Scotland to form their own budget. This worked well and a sizeable amount of funds were issued to Scotland based on employee location.
This year, the government has given Scotland the ability to not only collect the funds due, but set the thresholds which will govern how much should be taken from the employees. Unexpectedly the thresholds were reported to be changing. This has forced employees who reside in Scotland to pay the 40% tax before their counterparts in the rest of the UK.
The impact on Payroll software
There are obviously many implications when it comes to Payroll software, however, our system cleverly manages this issue by identifying those employees with a Scottish tax code and applying a different set of thresholds to them.
At present, HMRC have issued the previously notified values for system developers for them to build against. As the values have not been signed-off, they are fluid and highly likely to change. This close to April causes huge headaches for developers.
Not for us though…..we kept the thresholds away from code and stored in an editable settings location. Therefore, if there are any other changes at any time, we can simply upload a .CSV file and load this into the client orgs.
This obviously means data is accurate and our system is flexible to future needs. For more information on our payroll solution click here.