Paying Employers’ PAYE by Direct Debit

Did you know that you can pay employers’ PAYE by Direct Debit now?  Once you have set up the Direct Debit, future PAYE payments will be automatically collected.

In response to taxpayer feedback to HMRC, employers’ PAYE customers can take advantage of a new variable Direct Debit payment plan.  The service was introduced in October 2022 and can be accessed on the website through ‘Pay employers’ PAYE’ or through a business tax account.

Changes have been made to the business tax account and the employers’ liabilities and payments screens on the employers’ PAYE service. Now, a new link to ‘Set up a Direct Debit’ has been introduced to allow customers to set up a Direct Debit instruction, 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.

Charges you can pay using this type of Direct Debit

·          Full Payment Submission

·          Employer Payment Summary

·          Construction Industry Scheme

·          Apprenticeship Levy

·          Class 1A National Insurance

·          Earlier Year Update

Things to note

·          Your payment reference will be your 13-character accounts office reference number.

·          HMRC will automatically collect the payment from your bank account based on the amount in your return.

·          The Direct Debit should be set up for at least six working days before your payment due date and HMRC will usually take the payment either shortly after the 22nd of the month, or four working days after the return is filed (if filed after the 19th of the month).

·          HMRC will inform you of the date and the amount no later than three working days before the payment is collected.

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

·          You cannot use this type of Direct Debit to pay for any interest or penalties you owe or return payments over £20 million.

Please note, the facility to create, view, amend and cancel a Direct Debit is restricted to employers only; your accountant will not be able to do this on your behalf as your agent.

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