Paying PAYE to HMRC

Making Your PAYE Payments

As an employer, you have a legal obligation to deduct income tax and national insurance contributions (NIC) from your employees’ wages and pensions, and pay them to HM Revenue and Customs (HMRC) through the Pay As You Earn (PAYE) system ^.

This ensures that your employees pay the right amount of tax and NIC on their income, and that you comply with the tax laws and regulations.

But how do you make your PAYE payments to HMRC? What are the deadlines and methods of payment? And what happens if you pay late or not at all? In this newsletter, we will answer these questions and provide you with some useful tips and resources to help you manage your PAYE payments efficiently and effectively.

How to make your PAYE payments

You can make your PAYE payments online, by phone, or by post. The method you choose depends on your preference, convenience, and availability. Here are some of the most common ways to pay your PAYE bill:

Online or telephone banking: You can use Faster Payments or CHAPS to make a same or next day payment from your bank account. You need to use your 13-character accounts office reference number as the payment reference. You can find this in your HMRC online account, on the letter HMRC sent you when you registered as an employer, or in the front of your payment booklet if you have one ³.
Debit or corporate credit card online: You can pay online using a debit or corporate credit card. There is a fee for using this method, which is not refundable. There is no fee for using a personal debit card. You cannot pay by personal credit card. You need to use your 13-character accounts office reference number as the payment reference ⁴.
At your bank or building society: You can pay by cash or cheque at your bank or building society. You need a payment booklet from HMRC to do this. If you do not have one, you can ask HMRC to send it to you. You need to allow at least 3 working days for the payment to reach HMRC ⁵.
By cheque through the post: You can send a cheque by post to HMRC. You need to write your 13-character accounts office reference number on the back of the cheque, and include a payslip from your payment booklet. If you do not have a payslip, you can print one online from your HMRC account. You need to allow at least 3 working days for the payment to reach HMRC ⁶.

When to make your PAYE payments

You must pay your PAYE bill to HMRC by:

Between the 6^th and the 19^th of October

If you pay by cheque through the post, it must reach HMRC by the 19th of the month.

If the deadline falls on a weekend or bank holiday, make sure your payment reaches HMRC on the last working day before it (unless you are paying by Faster Payments using online or telephone banking).

You can check when your payment has been received by logging into your HMRC online account and viewing your statement.

What happens if you pay late or not at all

You may have to pay interest and penalties if your payment is late or not enough. The amount of interest and penalties depends on how late and how much you owe. You can avoid interest and penalties by paying on time and in full.

If you are unable to pay your PAYE bill in full by the deadline, you should contact HMRC as soon as possible and explain why. They may be able to arrange a payment plan with you, or give you more time to pay. However, this is not guaranteed, and you may still have to pay interest and penalties.

If you do not contact HMRC and do not pay your PAYE bill, they may take further action against you, such as:

Sending debt collection agencies to recover the money.
Taking money directly from your bank account.
Taking legal action against you in court.
Seizing and selling your assets.

Why not make it simple and pay HMRC by Direct Debit?

If you manage your own direct payments or PHB funds, you can now pay your monthly or quarterly PAYE bill (Tax and National Insurance contributions) to HMRC by Direct Debit, making this one less thing to think about!

Pay your bill automatically

HMRC will automatically collect the payment from your bank account based on the amount in your payroll return. You’ll only need to set the Direct Debit up once.

You will need to set up the direct debit at least 4 working days before your payment due date.

HMRC will usually take the payment either:

shortly after the 22nd of the month
4 working days after you file the return (if you file it after the 19th of the month)

HMRC will tell you the date and amount no later than 3 working days before the payment is collected. The payments will show on your bank statement as ‘HMRC SDDS’.

Follow the link below to find out more and set-up your direct debit with HMRC:

Pay employers’ PAYE: Direct Debit – GOV.UK (www.gov.uk)