PAYE Notice of Coding (P2)

[piː-eɪ-waɪ-iː ˈnəʊtɪs ɒv ˈkəʊdɪŋ (piː2)]

Term

Summary:

PAYE Notice of Coding (P2) is a letter that contains tax code for the upcoming tax year. This is to ensure you pay the correct amount of tax via PAYE.

More detail:

PAYE Notice of Coding (P2) is a document issued by HMRC to employed individuals informing them of their Tax Code for the upcoming Tax Year. It also includes reasoning on why they have that Tax Code, such as their tax-free allowance and any deductions or adjustments that have been made.

It is important to check that the information is correct as otherwise you will either overpay or underpay your tax. If you believe it is incorrect, you can contact HMRC and appeal the decision.

If you do not receive a P2, you can contact HMRC to ask for a copy. It is also possible to view your Tax Code online in your Personal Tax Account.

Back to Taxionary

You might also like...

What is IR35 and do I need to worry about it?

There are loads of different tax laws in the United Kingdom. IR35 is very important to freelancers and contractors but can be a little confusing. Here, we explain simply what IR35 is and who it can affect.

Earnr

Flat rates for mileage vs actual expenses. What is better?

Self-employed individuals can use two different methods to expense business vehicle costs. Here, we investigate the positive and negatives for both methods and which one might be right for you.

Earnr

What is the EIS and how does it work?

If you are looking to invest in small and medium sized businesses, the Enterprise Investment Scheme (EIS) provides lots of tax reliefs for doing so. Here we discuss what it is and how it works.