With the start of the 2015/16 tax year almost here, there are a couple of changes we wanted to make you aware of.
Collection of Tax Debts
If your tax return is filed early enough, it is possible to collect any tax debts through your tax code (provided you are subject to PAYE) – known as ‘coding out’. There used to be a limit of £3,000 which could be collected. However, from the start of the 2015/16 tax year, this increases as follows:
| Annual PAYE earnings | Coding out limits |
| Up to £29,999.99 | £3,000.00 |
| £30,000.00 – £39,999.99 | £5,000.00 |
| £40,000.00 – £49,999.99 | £7,000.00 |
| £50,000.00 – £59,999.99 | £9,000.00 |
| £60,000.00 – £69,999.99 | £11,000.00 |
| £70,000.00 – £79,999.99 | £13,000.00 |
| £80,000.00 – £89,999.99 | £15,000.00 |
| £90,000.00 and above | £17,000.00 |
Transfer of Personal Allowance between Married Couples
As previously mentioned, from 6 April 2015, 10% of the personal allowance is transferrable between married couples or civil partners, which is £10,600 x 10% = £1,060. To qualify, neither of the couples can be a higher rate taxpayer, and they need to be married or civil partners.
The claim can be made after the tax year has started. The partner receiving the allowance will gain £1,060 of tax free pay and have a code letter of ‘M’, rather than the usual ‘L’, whilst the partner giving the allowance will lose £1,060 of tax free pay and have a tax code letter of ‘N’ rather than the usual ‘L’.
In order to benefit from this, a claim will need to be made online, but the system to deal with this is not available yet.