How to handle tax codes with 'C' prefix?

Introduction

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:

  1. Navigate to Employees > Employee Accounts
  2. Edit the employee
  3. In the Deductions tab update the employee's Tax Code without 'C' prefix
  4. Tick "Welsh Tax?" checkbox below the tax code
  5. In the Statutory section untick the PAYE element and tick WIT element
  6. Save changes

After this the employee's tax deductions will be calculated with Welsh rates rather than English rates.


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