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Employers will shortly receive details from HMRC of what they can do to get ready for the tax code changes which will be required for many individuals following the Chancellor's announcement in May.

The Chancellor announced that the basic personal allowance is increasing by £600 from £5,435 to £6,035 and the basic rate limit is reducing from £36,000 to £34,800. The new tax codes and rate bands must be used from the first payday on or after 7 September 2008.

HMRC is writing to all employers advising that they can get ready in good time by:

• making sure that for every employee they have a P11 Deductions Working Sheet (P11) or equivalent record;
• applying any tax code changes that they get dated 23 August or earlier; and
• changing the existing tax codes following the last payday on or before 6 September in line with the instructions provided in the letter.

Bernadette Kenny, Director General Personal Tax, said:

"This letter includes some really useful information for employers. We are also updating our website so that all the relevant tools, tables and guidance that employers use will be at their finger tips come September.

"Employers will also get a revised Employer CD ROM along with Employer Bulletin issue 30 in August."