Tax code

Question asked by Marie Hughes 7 years ago

Hi, Can anyone help me please? A new employee has been self-employed and does not have a P45, what tax code do I use? 1100M1 or 1100X or neither of these? Thanks Shirley

2 Replies

In my opinion...

Technically if they've been self-employed they've had no other 'jobs' this year so would go onto 1100L. That would then leave any self-employed profits to be taxed in full via the Self Assessment next year.

Personally though I always tick the W1/M1 indicator and ignore any coding notice that comes through telling me not to. I'm sure it's naughty [I can see Paul S shaking his head already] but in the real world it ensures the worker isn't lead into a false sense of security before landing an unexpected tax bill next April.

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