From 6 April 2010, taxable income in excess of £150,000 is taxed at the additional rate of 50%. tax due at this rate is collected automatically in most case through the PAYE system. However, HMRC have yet to introduce a tax code to apply where all tax is due at 50%, for example where a person has a second job and taxable earnings from the first job exceed £150,000. In such cases, then full amount of tax due will not be collected through the PAYE system. Instead, the shortfall will be collected via self-assessment.
However, HMRC have announced that they will introduce a new tax code from 2011/12 to collect tax at 50%.
Further details are available in issue 36 of Employer Bulletin, which is available on the HMRC website.