PAYE: Employee tax refunds following increase to Personal Allowance

An increase to the 2008-09 Personal Allowance takes effect on 7 September and will be backdated to 6 April. This will involve tax code changes for many individuals, and many of your employees will have less tax to pay for the remainder of the tax year.

Some employees may be entitled to a refund of tax that they’ve already paid so far this year. The usual procedure is for you to fund any such refunds out of your other PAYE deductions by reducing your next payment to us.

But if your next payment is insufficient to cover the employee refund(s) you need to make, then you can claim funding from us to cover the balance.

Funding for employee tax refunds: how to apply