HMRC has acknowledged that problems with the new Real Time Information (“RTI”) system could see up to 40,000 people being issued with incorrect PAYE Coding Notices.

The errors have arisen due to partial Employer Alignment Submissions (“EAS”) being made where businesses have more than 250 employees, which has resulted in Benefit in Kind histories being removed.

Whilst smaller companies are not expected to provide an EAS, they have run into problems where they have employees on the payroll who have not been included in the first payments made via RTI.

Further, phantom tax codes have also been issued by HMRC, with individuals being issued with D0 codes because of a mismatch of information on the RTI system meaning it has been assumed that they have second jobs.

One firm has reported 500 incorrect Coding Notices out of 2,000 employees.

HMRC is relying on employees and employers to spot errors and then calling the appropriate Helplines to get the code fixed but as many employees do not understand their PAYE Code, this is likely to cause significant problems.

If you need any help with your payroll or with any payroll matters, please contact Matt Portt at

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