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Tax code notifications in QuickBooks Online Standard Payroll

Learn how to set up notification settings, enter HMRC credentials in QuickBooks and get answers to frequently asked questions about tax code notifications.

The Quickbooks tax code notification feature for Standard Payroll automatically updates employee's tax codes without the need to manually enter the new tax code.

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

  1. Sign in to the HMRC PAYE dashboard.
  2. Navigate to Messages.
  3. Select Notice Preferences and Notice Options which will allow you to set notices to Yes. After this has been done, any new notices will automatically update in QuickBooks.

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

HMRC settings in QuickBooks

To receive notifications in QuickBooks you need to have your HMRC references entered in Payroll settings. 

  1. Select the gear icon and choose Account and settings. 
  2. In the Payroll tab, find HMRC reference and select the pencil icon to edit. 
  3. Enter your PAYE reference. 
  4. Enter the Accounts Office reference. 
  5. Select Save

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

Tax code change notifications

There are three areas where the tax code change notifications will show in your QuickBooks. In the Employee list, the tax information found in the employee's details and when running payroll. Click the links below to see what they look like.

Tax code notices will be applied immediately or during the next pay run.

Any outstanding notices will be applied when you run payroll.

If you roll back a payroll period and/or revert to a previous pay run, the previous tax codes will also be reverted and the tax code applied will be that before the new notice.

Yes you can. However, after overriding a tax code or calculator method, when reverting/rolling back a payroll period the tax code will need to be manually reverted too.

You should only be changing the tax code if HMRC tells you. By changing tax codes, there's a chance that your employee may pay the incorrect amount of tax if their tax code is wrong. For any issues, ask your employee to contact HMRC.

No. Tax code notices will not be applied during the period an employee is leaving or that time after.

On top of the notifications listed, there are a number of notices that may pop up in QuickBooks. Some of these warnings pop up when:

  • there have been manual updates to tax codes, both before and after the changes have been made.
  • there are upcoming changes to tax codes which will show on the employee's tax information section.

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

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

Once you have entered valid HMRC credentials in the Payroll settings, the tax codes will be automatically retrieved from HMRC.

Yes. You will still receive notifications from HMRC which will come through the portal. 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, please contact HMRC.

Unfortunately there is no audit trail for tax code changes. You can view a previous payslip or report to see what the original tax code was before it was changed.

You'll need to provide the correct credentials in QuickBooks to receive the tax code notifications. The credentials you use should be for the employee you want to retrieve the notices for.

No, there is no additional cost.

The system updates the tax basis and tax codes. Although, if a tax basis changes, HMRC will also 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.

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

Yes, both P9 and P6 tax codes are supported and will update.

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

 

 

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