New tax year

For the 2024/25 tax year, the personal allowance remains at £12,570. This means that the emergency tax code also remains at 1257L and you don't need to apply a change to all employees' tax codes. However, if you receive a P9 or P6 from HMRC, you need to update an individual employee's tax code.

You should also clear any week 1 / month 1 flags for your employees before you process the first payroll of the 2024/2025 tax year.

 TIP: There are no separate increases for Scottish and Welsh tax codes and the following steps apply.

Update an employees tax code

There are different steps depending on how HMRC contact you. You may receive a letter through the post, or an electronic message in the IR Secure Mailbox within Sage 50 Payroll. 

Received a letter

1. Double click the required employee on your employee list.
2. Click the Employment tab.
3. In the tax code box, enter the tax code HMRC has stated.
4. Click Save

If HMRC have supplied a date that the tax code is effective from, click the + button, then add and enter this date.

IR Secure Mailbox Notification

If you haven't used the HMRC Mailbox before, you may need to set it up with HMRC. To find out more, visit our guide covering The IR Secure Mailbox and electronic notifications from HMRC >

1. Click E-submission, then click IR Secure Mailbox.
2. Select P9 notice.
3. Click Apply.

The employee tax code will now be updated, and you can now clear the week 1/month 1 flag.

Clear the week 1/month 1 flag

 Unless HMRC advise otherwise, you should use a cumulative tax code at the start of a tax year. Follow the steps below to do this.

 TIP: Week 1/month 1 is non-cumulative. 

1. Select the required employees.
2. Click Tasks then click Global Changes.
3. Click Tax Codes then click Clear W1/M1 flag.
4. Click Yes then click OK.