How to handle tax codes with 'C' prefix?
From 6 April 2019 HMRC requires employees living in Wales to pay their Income tax based on Welsh rates. These are indicated by a 'C' prefix in the employee tax code provided by HMRC.
Applying Welsh Tax Rates
To correctly calculate Welsh Tax Rates in Business Cloud Essentials:
- Navigate to Employees > Employee Accounts
- Edit the employee
- In the Deductions tab update the employee's Tax Code without 'C' prefix
- Tick "Welsh Tax?" checkbox below the tax code
- In the Statutory section untick the PAYE element and tick WIT element
- Save changes
After this the employee's tax deductions will be calculated with Welsh rates rather than English rates.