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Collection of Tax Debts via PAYE to increase to £17,000

7th October 2014

The current £3,000 limit for the coding out of tax debts via a PAYE coding adjustment will increase to £17,000 for higher earners, from April 2015.  

The measures, which propose a graduated, income related scale, mean a maximum tax debt of £17,000 can be collected via PAYE from a person with earnings of over £90,000.  There is no change in the limit for those with a primary source of PAYE income of less than £30,000 a year and the coding out cannot result in a tax deduction of more than 50% of gross pay in the pay period.  

The proposed graduated scale is below:

Earnings per annum £   <30K   30-40k   40-50k   50-60K    60-70K    70-80K    80- 90K  >90K
Coding out limit £    3,000   5,000  7,000   9,000    11,000 13,000 15,000  17,000