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Tax code notices in QuickBooks Online Core Payroll

by Intuit• Updated 1 month ago

Learn how to turn on tax code notifications in Core Payroll.

The tax code notification feature in Core Payroll lets you know about changes and updates made to your employees' tax codes. We'll show you how to set this up in QuickBooks.

To learn about tax code notices in QuickBooks Online Standard, see this article.

Step 1. Check your notification settings

For this feature to work, you need to log into your HMRC PAYE dashboard and make sure that all your notice options are set to Yes. To do so:

Sign in to the HMRC PAYE dashboard and go to Messages.
Select Notice Preferences and Notice Options.
Set notices to Yes. Any new notices will automatically update in QuickBooks.

If the notice option is not set, you'll see a banner in QuickBooks advising you that the PAYE reference in incorrect.

Step 2. Enter your HMRC reference

To receive notifications in QuickBooks, you need to enter your HMRC reference. Here's how:

Select the ⚙ icon and select Payroll settings.
Select the UK tax tab.
Select the pencil icon next to HMRC credentials.
Enter your HMRC reference and Accounts Office reference.
Select Save.

If you are an accountant using payroll on behalf of a client, enter the credentials that allow you to retrieve notifications.

Frequently asked questions

Where and when will tax notifications show in QuickBooks?

Tax code change notifications will show in your employees list, the employee's tax information and the pay run when running payroll. Tax code notices will apply immediately or during the next pay run.

Here are some examples of what these notifications look like:

What happens to unapplied notices?

Any outstanding notices will be applied when you run payroll.

What happens if I roll back a pay run?

If you roll back a pay run (or revert to a previous pay run) then the previous tax codes will also revert back and will apply.

Can I manually override tax notices?

Yes, you can. However, if you roll back a pay period and override the tax code or change the calculator method, you'll need to manually change the tax codes back too.

Important: You should only be change tax codes if HMRC tells you. There's a chance that your employees may pay the incorrect amount of tax if their tax code is changes and isn't correct. We suggest reaching out to HMRC directly for any questions.

Are tax code notices applied to leavers?

No. Tax codes notices will not be applied during the period an employee is leaving or after they leave.

What kind of tax notices can I expect to see?

There are a number of notices that may pop up in QuickBooks. Here are a few scenarios:

If there's been automatic updates to employee tax codes – which you can see in your employee list or the affected employee's profile.
If there's been manual updates to tax codes, both before and after the changes are made.
If there are upcoming changes to tax codes – these will show in the employee's tax information.

Most tax code change notifications will show on mobile, desktop and most web browsers.

Are Scottish, Welsh and non-standard tax codes supported?

Yes! Scottish, Welsh and non-standard tax codes are supported.

Will automatic changes to payroll tax codes start to happen automatically?

You will need to switch on the tax notification feature in QuickBooks. Once you enter your valid HMRC credentials in the payroll settings, QuickBooks will automatically retrieve the tax codes from HMRC.

Will I still receive tax code notifications from HMRC?

Yes, you will still get notifications from HMRC. These notifications will come through the portal and it's not currently possible to stop these notifications.

Once you sign up to the automated tax code service through the portal, paper notifications should stop. If you continue to receive the paper notifications, reach out to HMRC.

Is there an audit trail to show the tax code changes?

Unfortunately, there's no audit trail for tax code changes but you can use previous payslips and reports to see the original tax codes.

I have multiple clients under one HMRC user ID, which credentials should I use?

You'll need to provide the correct credentials in QuickBooks to be able to retrieve the tax code notifications. Use the credentials for the employee/client you want to retrieve notices for.

Is there an additional cost to use this feature?

There is no additional cost to use the tax code notifications feature in QuickBooks Online.

Is the tax basis updated?

QuickBooks updates the tax basis and tax codes. Although, if a tax basis changes, HMRC will send the tax code too.

For example, if a tax code changes from 1250L to 1250L W1/M1, then 1250L W1/M1 will be sent through from HMRC.

Will student loan notifications update too?

Unfortunately this isn't currently supported in QuickBooks. Student loans, postgraduate loans, NI numbers, previous taxable pay and tax paid may be part of future releases.

Will P9 and P6 tax codes update?

Yes. Both P9 and P6 tax codes are supported.

Will P9 notifications update at the beginning of the tax year for all new tax codes?

P9 notifications (start of the tax year) will show around February/March with an effective date of the new tax year (6 April), so it should only be applied once at the beginning of the new tax year.

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