[UK] Paying Employers PAYE by Direct Debit

19 Aug 2022

From 19 September 2022, it will be possible to pay Employers PAYE by Direct Debit in the UK. The Direct Debit will need to be set up only once and it will automatically collect the monthly PAYE payment in the future, MCL reports.

HMRC heard taxpayers’ demands and added this variable Direct Debit payment plan functionality so Employers PAYE can now be paid by Direct Debit. The service can be accessed through Pay employers’ PAYE or directly through the business tax account and the employers PAYE service.

There will reportedly be changes to the business tax account and the employers’ liabilities and payments screens on the employers’ PAYE service. A ‘Set up a Direct Debit’ link will be introduced and this will allow customers to pay Employers PAYE by Direct Debit; authorising HMRC to collect directly from their bank account based on their return submissions.

Following set up, the link will change to ‘Manage your Direct Debit’ and an employer will be able to view, change or cancel the Direct Debit online.

The facility to create, view, amend and cancel a Direct Debit is restricted to employers only, there is no scope for agents to help pay Employers PAYE by Direct Debit.

If signed up to the variable payment plan to pay Employers PAYE by Direct Debit, the following charges will be collected on receipt of the returns to HMRC:

Full Payment Submission
Employer Payment Summary
Construction Industry Scheme
Apprenticeship Levy
Class 1A National Insurance
Earlier Year Update

Timescale

Allow 5 working days to process a Direct Debit the first time you set one up. It should take 3 working days the next time if you’re using the same bank details.

The payments will show on your bank statement as ‘HMRC NDDS’.

You must pay your PAYE bill to HM Revenue and Customs (HMRC) by:

the 22nd of the next tax month if you pay monthly
the 22nd after the end of the quarter if you pay quarterly – for example, 22 July for the 6 April to 5 July quarter

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

Pay online with 13-character accounts office reference number

You will need to use your 13-character accounts office reference number as the payment reference. You can find this on either:

the letter HMRC sent you when you first registered as an employer
the front of your payment booklet or the letter from HMRC that replaced it

You need to add 4 additional numbers to the end of your 13-character accounts office reference number each time you make an early or late payment. If you use this service, it will work out the numbers for you.

Click here to pay now.

Check your payment has been received

Check your HMRC online account which should update within 6 working days of making payment.

If you are paying by post, you can include a letter with your payment to request a receipt from HMRC.

Tell HMRC no payment is due

You must tell HMRC if you have not paid any employees for at least one tax month.

You can tell HMRC by filling in an Employer Payment Summary (EPS).

You must send it by the 19th of the month following the tax month when no employees were paid.

If you do not send an EPS, HMRC will send you a notice estimating how much you owe and you may have to pay a penalty.

Telling HMRC in advance

You can inform HMRC that you will not pay any employees up to 12 months in advance.

Contractors in the Construction Industry Scheme (CIS) who have no payments to make need to tell HMRC through a CIS return and a EPS. CIS contractors with payments to make only need to file a CIS return.

Source: MCL

(Links via original reporting)