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HMRC have moved to clarify the remodelling of the basic rate band limit, following this month's Budget.
The Revenue has warned employers with computerised payrolls that they will need to ensure they have new software in place by the start of the forthcoming new tax year.
The change will be implemented on the first pay day after 17 May 2008, and will require a second set of tax tables with a 'use from 18 May' instruction.
The revised tables are currently being prepared and will be available to download from the HMRC website or to order from the Employer Orderline in mid-April.
The Revenue added that employers with computerised payrolls will need to make sure their software already includes these changes or is updated again to include the revised tax tables ready for use on the first pay day after 17 May.
The department went on to point out that the way PAYE calculations are made on a cumulative basis means that changes will be backdated to 6 April 2008 for all employees who pay tax in the 40% rate band.
However, where PAYE is operated on a week one/month one basis, the new band will be applicable from the first pay day after 17 May 2008.
