Before entering any amount of earnings which is non-PAYE income which is to be included in the tax code, you must first follow the guidance at PAYE12060.
For PAYE only cases, earnings should be entered on this screen.
For PAYE / SA cases, earnings should only be entered on this screen if the latest SA return reflects that the individual is content to have non-PAYE income coded out. If the individual does not want the earnings to be coded out then the total gross earnings should be included as part of the non coded income and all other items reduced to zero.
The amount will be used by the system when calculating the total income calculation for coding purposes only. It will not create an adjustment in the tax code but will identify indicators to be set. It will not be taken into account in the end of year reconciliation as all these cases should be SA Cases.
The table shows the type of earnings and identifies whether, the amount is carried forward to be coded in CY+1
| Item | Carried Forward |
|---|---|
| Non coded income | YES |
| Commission | YES |
| Other income (earned) | YES |
| Other income (not earned) | YES |
| Part time earnings | YES |
| Tips | YES |
| Other earnings | YES |
| Casual earnings | NO |
Enter the new amount in whole pounds in the relevant field for the following income
Non coded income
Income included in this field should always be the gross amount and not the net amount. This will ensure the tax code calculation is correct;
- the non coded income field should include non-PAYE income for SA cases and some R40 cases, see further guidance in Action guide tax40026. That is items not being included in the tax code
- an entry may be included in this field in PAYE cases where an individual has advised details of a new source of non-PAYE income which is less than £2,500, see PAYE12060. This will ensure the correct calculation of an individual’s total income
- if the individual chooses to complete a tax return, create a new SA record
- if the individual chooses to pay income tax through their code, ensure any income recorded in the non coded income field is amended to nil and then entered into the correct field in IABD to which it relates
- the non coded income field should be used to enter any other amount of income which is not PAYE income
- the non coded income field should be used to enter any type of income that needs to be included in total income calculations, but should not be included as a tax code item, see Action guide tax80002
- if a record becomes a non SA case and there is a non coded income amount recorded you will need to ensure this is amended to nil and then recorded into the correct fields to which it relates. This will be for the first year of PAYE only
- when income does exceed the £10,000 non PAYE income limit or the 50% K code limit has been reached any excess non PAYE income will be included in the Non coded income field, this is an automated process for SA autocoding
Note: If you update any of the non PAYE income fields that make up non coded income prior to SA autocoding taking place you should update all the non PAYE income and non coded income fields, so that SA autcoding maintains the correct non coded income figure.
Note: The non coded income amount entered will be included with the PAYE income and Benefits in Kind (BIK) amount for the Total Income figure on which coding calculations are based. It will not be used in the End of Year reconciliation.
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Commission
For more information see PAYE11115
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Other income (earned)
Include any untaxed earned income which is not covered by Self Assessment. For more information see PAYE12060
In your day to day work for SA cases only any income recorded as ‘Other income (earned)’you should
- make a note of the amount
- reduce the amount recorded to zero
- enter the amount noted in the other earnings field
- trigger a code calculation
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Other income (not earned)
Include all other unearned income. Do not include Foreign Income, this should be recorded as at PAYE130055. For more information see PAYE12060
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Part time earnings
For more information see PAYE11115
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Tips
For more information see Action guide tax80002
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Other earnings
Include income such as Freelance Income or Statutory Sick Pay / Statutory Maternity Pay (SSP / SMP) payments in the current year see Action guide tax80002
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Casual earnings
Include earnings which are received by an employee / individual which are below the National Insurance Contributions lower earnings limit and not being paid concurrently with another job, taxable Jobseeker’s Allowance or Incapacity Benefit
