31 March 2026

As we step into the 2026/27 tax year, HMRC has released the new P9X Tax code guidance, here is your roundup of the key things to check, change and action to help everything run smoothly.

Key Tax Facts

  • Personal Allowance remains at £12,570
  • Tax thresholds remain the same for UK and Wales, but Scotland has updated their starter, basic, and Intermediate thresholds – check these out on our handy 2026-27 Legislation Update     
  • Emergency tax code remains at 1257L.

Great to keep those figures handy as you review codes and set up your April payroll.

 

Give your payroll records a fresh start

HMRC asks employers to get payroll records ready for anyone working on 6 April, which means:

  • Setting up or refreshing the payroll record
  • Making sure you have got the correct tax code – checking prefixes such as S if they reside in Scotland or C if they reside in Wales
  • Updating the payroll system with the correct code.

You will find new codes via paper P9(T) notices sent through the post or PAYE Online notifications – so it is worth checking those inboxes.

 

Handling this year’s tax codes

  • If an employee does not have a new code – just carry forward their authorised 2025/26 tax code, but do not roll over any W1 or M1 non-cumulative markers
  • If an employee does have a new code – use the coding notice with the most recent date and ignore previous notices for the same employee.

It is good practice to verify that updated codes have been fully captured before processing the April payroll.

 

Employees leaving employment before 6 April

A common question at this time of year!

  • If someone leaves before 6 April, keep their old tax code, even if their pay date is after the tax year starts
  • Only if a P45 has already been given and you are making a payment after leaving would you switch the tax code to 0T, S0T, or C0T on a non-cumulative basis.

Just a small detail – but an important one.

Other new year must-dos

Alongside the tax code updates, do not forget:

  • National Minimum Wage rates are applied from the first pay period after the 1 April
  • Check the latest rates and thresholds from HMRC and check they are updated correctly in your systems
  • Ensure your 2025/26 tax year final Employment Payment Submission (EPS) is submitted by the deadline 19 April 2026
  • Issuing P60 forms to all employees employed by you on the 5 April by the 31 May deadline.

Great housekeeping helps keep everything compliant and hopefully stress-free.

As always, the start of the tax year is a busy but rewarding time for both employers and pay professionals, and getting these fundamentals right now sets you up for a smooth year ahead.

 


Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information. 

More news