Paying PAYE

Sep 27, 2022

As an employer you can pay PAYE to HMRC using a direct debit (DD) but each DD authority only applies for a single payment, so the effort is hardly worth it.

The good news is that from mid-September you will be able to set up a recurring DD facility to pay your PAYE liabilities as you can for your regular VAT payments.

This new DD facility will be accessed via your online Business Tax Account (BTA) on gov.uk. When you next log in to your BTA, look for a new link titled ‘set up a direct debit’. When you activate this link it will give HMRC authorisation to collect the exact amount of PAYE shown as owing on your RTI returns. You should also see a new line in your BTA: ‘manage your direct debit’ which will allow you to cancel or change the DD online.

PAYE settlement agreements (PSAs) are used to pay PAYE on one-off benefits that apply to many employees. Setting up a PSA is a pain as it requires a paper form (PSA1). If you have some employees who are resident in other tax jurisdictions, such as Scotland, a separate PSA1 form was needed for each jurisdiction.

However HMRC have launched a new online PSA1 which can be completed just once for all employees irrespective of where they are resident. This should mean that HMRC can process the PSA1 quicker and there will be fewer mistakes.

Other Autumn Tax Briefing 2022 articles

Working at home deductions

Electronic sales suppression

Cost of travelling to work

Reporting UK property gains

Paying your income tax bill

Loans to employees

Beware of early RTI returns