As we approach the end of one tax year and begin preparations for the new one, an essential document for all UK payroll professionals is the P9X...

** Update – the P9X has been updated to take into account the Scottish rates and bands that were approved in the Scottish Rate Resolution on 20 February 2018. It’s 100 times better than before but still says that there is a UK tax rate and a Scottish tax rate. There is not a UK rate, only a rUK (rest of the United Kingdom) rate. **

As we approach the end of one tax year and begin preparations for the new one, an essential document for all UK payroll professionals is the P9X.

This was published on 01 February 2018 by HMRC and has been promoted by several payroll bodies via newsletters. Whilst I have also provided a link to it, I need to say that it is not correct.

What is the P9X?

Amongst other things, this guidance document explains the earnings thresholds for the new tax year, the tax codes to carry forward, the ones to change and how they should be changed.

It also explains what to do in the situations where a P45 from a new employee is received between 06 April and 24 May 2018.

It is important reading.

So what’s wrong with it?

The information in the top paragraph has to be read with a large pinch of salt:

  • The very first line is correct when it says that the Basic Rate limit for 2018/19 is £34,500. What it fails to mention is that this is for rUK (rest of the United Kingdom) Taxpayers only
  • The second line says that the Basic Rate limit for 2018/19 is £31,500 for Scottish Taxpayers. This is not correct (but is the limit that applies in 2017/18)
  • There is no UK rate when it comes to rates and bands. There is a rUK rate but no UK rate
  • The Scottish rates are correct, however, the bandwidths are not. The day before the P9X was published, the Scottish Draft Budget scrutiny process changed these and Derek Mackay’s statement appears on the SNP Website. The statement said that the point at which the Higher Rate would be paid will be £43,430 in 2018/19. Taking away the value of the UK-wide Personal Allowance of £11,850, the following bandwidths will apply in 2018/19:

Of course, these thresholds still have to be ratified in the Scottish Rate Resolution on 20 February 2018.

In conslusion

Employers can do many things with the P9X that was published on 01 February 2018. I could make several suggestions, however, the one thing that they must not do is use it or rely on it for accuracy. UK professionals rely on and expect accuracy and this is a dangerous and incorrect document that should have been read before it was promoted via newsletters.

I have contacted HMRC to make them aware and asked them to withdraw it.

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