Employers are not always responsible for informing HMRC of changes, and workers could be held liable if they’re found to have deliberately concealed the shift
There are several life and career changes that can impact how HMRC calculates your tax dues. While some of these changes are reported by your employer or pension provider, there are four specific changes that workers must report to HMRC themselves. These changes can be reported online or by calling HMRC directly. More information can be found here.
Failure to inform HMRC could result in workers paying the incorrect amount of tax. This could lead to either a tax refund or an additional tax bill at the end of the year. In more serious cases, if HMRC discovers that you’ve intentionally hidden these changes, the penalty could be as severe as doubling your tax bill, more information about penalties can be found here.
The changes that workers need to report to HMRC include changes to names or addresses, income, family or relationship status, and gender. Changes to names and addresses can be updated online, although people may need to sign in through the Government Gateway. Alternatively, they can use the HMRC app. For those changing their gender, their name will be automatically updated.
Employers and pension providers will notify HMRC when workers start or finish a job, or if there’s a change in the money earned from your job or pension. However, workers are responsible for reporting a range of other changes such as receiving money from a new source like a rental property, certain company benefits, receiving taxable benefits or getting lump sums from selling things that are liable for Capital Gains Tax.
If your spouse or civil partner passes away and your income alters, you must notify HMRC. Following this notification, HMRC may adjust your tax code, ask you to submit a Self Assessment tax return, or provide a tax refund if you’ve overpaid.
Changes in relationship or family status also require notification to HMRC. This includes getting married, forming a civil partnership, divorcing, or separating.
You can do this online by signing into your tax account. However, HMRC warns: “Tell HMRC straight away – if you do not, you could pay too much tax, or get a tax bill at the end of the year.”
In terms of gender change, HMRC is typically informed automatically when you legally change your gender by applying for a Gender Recognition Certificate. It’s recommended that workers inform their employers simultaneously to update payroll records and National Insurance contributions.
Once reported, HMRC will update its records with your new gender and any name change, inform the Department for Work and Pensions, restrict access to your records to specialist staff only, and transfer your tax affairs to HMRC’s Public Department 1. You’ll receive a letter confirming the move, after which you can contact Public Department 1 with any queries about your tax or National Insurance.
If you neglect to inform HMRC about changes to your income tax liability, the authority will probe into it and categorise your actions under one of three different behaviour types. Each type carries a different penalty level, calculated as a percentage of the tax that went unpaid due to the failure to notify.
The behaviours and penalty ranges:
- Non-deliberate – 0% to 30%
- Deliberate but not concealed – 20% to 70%
- Deliberate and concealed – 30% to 100%
However, the authority has stated: “If you have a reasonable excuse for a non-deliberate failure to notify, we will not charge you a penalty.”
