PAYE coding cap for 2015/16: The maximum that HMRC can collect via an employee’s PAYE in addition to current income tax is £3,000, but this is changing. New regulations (SI 2014/2689) will enable HMRC to amend PAYE codes for 2015/16 onwards (ie, codes to be issued next spring to apply from 6 April 2015) to collect up to £17,000 of self-assessment and Class 2 NIC debts, and to recover child tax credit and working tax credit overpayments.

The cap remains at £3,000 for self-assessment ‘balancing payments’ and PAYE underpayments, but there is a new income-related scale of maximum additions that can be reflected in K-codes.

Those whose PAYE income (earnings and UK pensions) is expected to be less than £30,000 will still have their tax debts collected via PAYE capped at £3,000, but for every £10,000 of expected PAYE income above that, the cap rises by £2,000, to a maximum of £17,000 for those who earn £90,000 or more.

Tho