DMBM618355 | Pre-enforcement: coding out: Self Assessment (SA) and Tax Credit (TC) overpayments: P2 annual coding notice

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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 when there is a change of a customer's tax code. 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:

Outstanding Debt Restriction

This is the outstanding debt you owe HMRC from a previous year. This may not be the total outstanding debt that you owe. For this year we are collecting £204. This is made up of individual debt(s) as follows:

SA: £170

NTC: £ 168

Class 2: £185

We intend to collect this debt in equal instalments up to 5 April by reducing your tax -free allowance. This will increase the tax deducted from your wage, salary or pension.