UK coding out debts deadline

UK coding out debts deadline

The coding threshold entitles taxpayers to have tax underpayments collected via their tax code, provided they are in employment or in receipt of a UK-based pension.

UK coding out debts deadline

This post is brought to you by Exceed Chartered Accountants – your trusted partner in business

The coding adjustment recovers debts such as self-assessment liabilities, tax credit overpayments and outstanding Class 2 NIC contributions. Instead of paying off amounts outstanding as a lump sum, money is collected in monthly installments over a full tax year.

The amount of debt that can be coded out ranges from £3,000 to £17,000 based on a graduated scale. The maximum coding out allowance only applies to taxpayers with earnings exceeding £90,000.

The full breakdown is copied below:

Earnings Coding out limit
Less than £30k £3k
£30k to £39,999.99 £5k
£40k to £49,999.99 £7k
£50k to £59,999.99 £9k
£60k to £69,999.99 £11k
£70k to £79,999.99 £13k
£80k to £89,999.99 £15k
£90k or more £17k

Taxpayers with underpayments in the tax year 2015-16 have until 30 December 2016 (as opposed to the normal 31 January deadline for electronic returns) to file their self-assessment returns in order to have the monies collected in the 2017-18 tax year starting on 6 April 2017.