Most people glance at their tax code once, assume it’s correct, and forget about it.
From April 2026, that could become expensive.
HMRC will begin removing certain adjustments from tax codes, particularly employment expenses and higher-rate Gift Aid relief, where there isn’t enough recent evidence to support them.
Here’s what’s changing:
Employment expenses over £120 included in a tax code will be removed from 2026/27 if any of the following apply:
• No current PAYE income
• A full tax year employment gap since the expense was claimed
• No self-assessment return filed since 2021/22 where indicators suggest the expenses should have been reported
• Expenses included in the tax code exceed those claimed on the 2022/23 self-assessment return
Higher-rate Gift Aid relief will also be removed from tax codes where:
• The same relief has been included for 3+ years, and
• No self-assessment return has been filed within the last 3 years
For some, this will simply correct outdated information. For others, it may mean a reduction in take-home pay if the relief is still valid but no longer reflected in the code.
It’s worth reviewing your tax code before April 2026 rather than after your net pay changes.
If you would like us to review your position, get in touch.
- Saffron Powar, Assistant Tax Consultant