I imagine that you will all be aware that that HM Revenue & Customs (HMRC) can recover tax and tax credit debts through your PAYE codes, the upper limit for which is currently £3,000. HMRC say that this form of debt collection is a “relatively simple, cheap and a less intrusive way”.

You of course may disagree with this assertion and would rather be given the opportunity to choose how you make your payments but accept the current amount of up to £3,000 isn’t bad.

If the above paragraph  describes you then you’ll want to be aware that regulations introducing a graduated scale taking effect for 2015/16 have been laid before parliament. The measures will permit more debts to be collected in this manner.

The limit on the amount which can be ‘coded out’ is to be increased from £3,000 to £17,000 for those whose PAYE income is expected to be at least £90,000. There are to be no changes for those of you whose income is expected to be less than £30,000 and there will still be the overriding limit of 50% of income.

There is a little bit of light in this legislation in that if you have a tax credit debt you can object to that debt being coded out.

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