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HMRC internal manual

PAYE Manual

Coding: coding allowances and reliefs: allowances

Give each individual a coding allowance for all personal reliefs he or she is due.

The system sends return forms or targeted review forms only in selected cases. For others it assumes the current year coding allowances should continue for the following year. If you know they should be different update the details to give the correct allowances.

You may occasionally need to give an allowance or relief on a provisional basis. If you do, be sure to make it clear to the individual that it is only provisional.

This is because a P2 or letter is normally enough to determine an individual’s claim to an allowance or relief. It may be binding on HMRC, even if in the end the allowance or relief is not due.

This does not apply if it is only the amount of an allowance or relief that is in doubt,for example with an age-related allowance or relief for interest paid.

This section does not cover in any detail the conditions for granting a particular allowance. Guidance is provided in other manuals and details of where you can find this is given for each topic covered. This section of this Manual concentrates on matters relating to coding and other points of interest once you have decided that an allowance is due.