From 03rd October 2022, you can pay Employers PAYE by Direct debit. You will need to set up the Direct debit once and it will automatically collect the monthly PAYE payment in the future.
This service was expected to go live by 19th September but Hmrc have confirmed that the start date for this service has been delayed to 03rd October 2022.
How to pay Employers PAYE by direct debit?
We often get asked by clients as to how they can pay Employers PAYE by direct debit every month without the need to set up a new Direct debit instruction each time they want to pay HMRC.
The good news is that HMRC has finally listened to the taxpayer (their “customers”) and added this variable direct debit payment plan functionality so you can now pay Employers PAYE 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 be changes to the business tax account and the employers’ liabilities and payments screens on the employers’ PAYE service. A new link ‘Set up a Direct Debit’ 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
How long does it take to pay Employers PAYE by Direct debit?
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 using the 13-character accounts office reference number
You’ll 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 extra 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.
How to check your payment has been received
Check your HM Revenue and Customs (HMRC) online account – it should update within 6 working days of making payment.
If you’re 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 HM Revenue and Customs (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. You may have to pay a penalty.
Telling HMRC in advance
You can tell 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.
How can MCL Accountants help?
Contact MCL Accountants on 01702 593 029 if you have any queries on how to pay Employers PAYE by Direct debit or if you need any assistance with the preparation and submission of your business accounts or self-assessment tax returns to HMRC.