Methods and devices for modified coding of blocks of residuals in the case of transform skipping. To better align the data with assumptions upon which the entropy coding scheme is based, the block of residual data is permuted at the encoder prior to entropy coding. The block of reconstructed data is then inverse permuted at the decoder to recover the reconstructed block of residuals. The permutation may include 180 rotation of the block, which may be of particular benefit in the case of intra-coded residuals.