Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
, see all updates

Pre-enforcement: coding out: Self Assessment (SA) and Tax Credit (TC) overpayments: P2 annual coding notice

The P2 is a personalised communication telling the customer how their code has been calculated and provides an explanation of each part of the calculation. P2s are issued by the annual coding process between January and March to inform customers of any change to their code for the coming tax year. NPS(PAYE) Contact history will include a note when a P2 notice of coding has been issued.

There is an invitation to make contact using a number shown on the P2 if a deduction or allowance is incorrect or no longer relevant. Personal Tax Customer Operations will redirect calls to DMTC and post to the relevant DTO if they are unable to clarify any coded out debt issues.

Coded out deductions will be shown on the P2 as ’Outstanding Debt Amount ‘. The P2 notes will contain the following explanations:

Reduction to collect unpaid Self Assessment Outstanding Debt

“You owe £value self assessment tax. We have written to you previously asking for payment of this amount. We told you that if you did not pay what is due then we would collect it by adjusting your tax code”.

Reduction to collect overpaid Tax Credit Outstanding Debt

“You owe £value overpaid tax credit. We have written to you previously asking for payment of this amount. We told you that if you did not pay what is due then we would collect it by adjusting your tax code”.

Reduction to collect unpaid Self assessment Tax and overpaid Tax Credit

“You owe £value self assessment tax and £value overpaid tax credit totalling £value. We have written to you previously asking for payment of this amount. We told you that if you did not pay what is due then we would collect it by adjusting your tax code”.