What Does HMRC Include in Your PAYE Bill?
- Class 1 and 1B National Insurance
- Class 1A National Insurance on sporting testimonials and termination awards
- Construction Industry Scheme (CIS) deductions
- Employee Income Tax deductions
- Student Loan repayments
- Apprenticeship Levy payments (beginning April 2017) if you (or connected employers) have an annual pay bill over £3 million
The best way to avoid paying PAYE late payment or filing penalties is to pay HM Revenue and Customs before the deadline date.
But, you must allow enough time for your payment to reach their office. For example:
- Payments made using Faster Payments, CHAPS, or debit or corporate credit card usually arrive the same day (or the following day).
- You should allow at least three (3) days for Bacs payment (Bankers’ Automated Clearing System), Direct Debit, or a cheque to clear (not at the Post Office).
- It could take five (5) working days for Direct Debit to clear if you have not already set it up with HMRC.
You can check the UK bank holiday calendar to see if the deadline date falls on a weekend or public holiday (e.g. Easter or New Year’s Day).
If so, you need to make sure your payment reaches HM Revenue and Customs no later than the last working day before it (unless paying by Faster Payments).
HMRC Payment Booklets
You can order payslip booklets online from HM Revenue and Customs to make a payment at a bank or building society (or by post). You can also stop HMRC sending a payment booklet if you no longer use them.
What if you use electronic payments to pay employers’ PAYE and National Insurance? If so, HMRC stop sending payment booklets once you make two (2) or more electronic payments in any given tax year.
Note: Another section explains more about paying HM Revenue and Customs as part of the regular payroll tasks employers need to perform.
Paying by Direct Debit
You can set up a single payment for paying a PAYE tax bill through your HMRC online account. Remember to use your 13-character accounts office reference number and check your bank statement for ‘HMRC NDDS’ to confirm the payment.
It takes around five (5) working days to process a Direct Debit (the first time) and then around three (3) working days thereafter (if using the same bank details).
Note: Enter the correct month and year for the payment in the separate boxes if you are making early or late payments.
Online or Telephone Banking, Bacs, CHAPS
You need to use your 13-character accounts office reference number to pay HM Revenue and Customs (HMRC) by Faster Payments, Bacs, or CHAPS.
Sort Code: 08 32 10
Account Number: 12001039
Account Name: HMRC Cumbernauld
It is important to use the correct reference number. You can find it on the front of your payment booklet and on the letter sent to you by HMRC when you first registered as an employer.
Furthermore, it is worth checking the transaction limits and processing times for the bank that you use before making a payment. But, in most cases:
- Making a payment by Faster Payments (e.g. online or telephone banking) would usually reach HM Revenue and Customs on the same or next day (includes bank holidays and weekends).
- Payments made by CHAPS within the processing times of your bank should reach HMRC on the same working day.
- Payments made by Bacs (previously called Bankers’ Automated Clearing System) will take at least three (3) working days.
Making Early Payments
If you are paying employers’ PAYE monthly (e.g. before the 6th of the tax month that payment is due) you must add extra numbers to your reference number.
Likewise, if you are paying it quarterly (e.g. before the 6th of the second month in the quarter) you also need to add extra numbers to your reference number.
Note: HMRC provides an online PAYE / NIC current year reference checker to help you work out which number to use.
Making Late Payments
No matter whether you pay monthly or quarterly, you will need to add extra numbers to your reference number if you make late payments (on or after the 5th of the tax month after payment was due).
Note: The PAYE / NIC previous year reference checker is a different tool used for working out extra numbers for previous tax years.
Multiple PAYE Schemes
You can apply to make a multiple or composite CHAPS payment with the Cumbernauld office to make a single payment via CHAPS for multiple PAYE schemes.
HMRC Banking Address
Barclays Bank PLC
1 Churchill Place
Debit or Corporate Credit Card (online)
You will encounter a non refundable fee if you choose to pay online using a corporate credit card. It cannot be a personal credit card.
To make a payment for the previous tax year you need to select the year and ‘month 12’ (e.g. for the last tax year). Failing to do so means the payment will go to the current tax year instead.
Paying at Bank or Building Society Branches
You must use your 13-character accounts office reference number to make a payment by cash or cheque at your bank or building society (made payable to ‘HM Revenue and Customs only’).
Sending Cheques by Post
Provided you have less than 250 employees, you can send a cheque by post to HMRC (street name, city name, PO box not required). Make sure you allow at least three (3) working days for it to arrive.
Make cheques payable to ‘HM Revenue and Customs only’ and write your 13-character Accounts Office reference number on the reverse side. Remember to include the correct payslip (unfolded) and do not use staples to fasten them together.
Failing to fill in the correct information on the cheque can delay the payment. You can include a separate note if you want to get a receipt.
Note: You can print your own PAYE/Class 1 National Insurance contributions payment slip when paying by post (not at a bank).
Check if HMRC Received Your Payment
There are several ways to check if your payment has been received. For example, your bank or building society statement will confirm whether the payment has left your account – or not.
You can also check your HM Revenue and Customs (HMRC) online account or ask for a receipt if you are sending the payment by mail.
Telling HMRC No Payment is Due
What if you do not pay any employees for one tax month (or longer)? In this case, you would need to notify HM Revenue and Customs by filling in an Employer Payment Summary (EPS) and send it no later than the 19th of the month following the tax month when no employees received any pay.
Note: Failing to send an EPS can result in a notice estimating the amount that you owe (and a penalty).
Informing HMRC about Periods of Inactivity
You can tell HMRC in advance if you will not be paying any employees for a minimum period of one (1) month up to a maximum of twelve (12) months.
Note: Contractors in the Construction Industry Scheme who make payments only need to file a CIS return. But, CIS contractors would need to tell HMRC through a CIS return and a EPS if they have no payments to make.