Employers’ PAYE variable direct debit

Sep 14, 2022 | Taxation

Note: This blog was updated on 22 September following the announcement that the PAYE Direct Debit roll-out has been delayed to October

From 3 October 2022 (delayed from 19 September), you will be able to pay employers’ PAYE and NIC liabilities by variable direct debit. In this blog, we answer some key questions to help get you started.

How do I set-up the direct debit?

The service can be accessed through HMRC’s Pay employers’ PAYE page 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 set up a direct debit instruction, authorising HMRC to collect direct from their bank account based on their return submissions.

What paperwork will I need?

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

  • the letter HMRC sent you when you first registered as an employer
  • the P32 report sent through with associated payroll reports each month

What is collected?

Once the direct debit has been set-up, it will authorise HMRC to automatically collect the monthly PAYE payment going forward based on the figure declared on returns submitted by you or your payroll agent.

The direct debit will be taken on the 23rd of each month, or the next bank working day. You will receive notice three days prior to collection notifying you of the amount being collected.

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

Can I amend the direct debit?

After set-up, the link ‘Set up a direct debit’ will update to read ‘Manage your direct debit’. This will enable an employer to view, amend or cancel the direct debit.

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’.

 

For more information, visit GOV.UK, contact your usual relationship principal or email intouch@haroldsharp.co.uk.

Note: There is no scope for us as an agent to help you set-up or amend the direct debit in any way.