Smarter accounting

Monthly PAYE payments or quarterly payments?

15 May 2019, Employer

How to pay your PAYE to HMRC

The easiest way to pay your PAYE to HMRC is by bank transfer.  The bank details for HMRC are shown below.

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
  • Your online HMRC account

HMRC bank details for PAYE

Sort codeAccount numberReference
08 32 1012001039Your accounts office reference

Sample Letter from HMRC to change PAYE payment frequency

Change from quarterly to monthly PAYE payment plan

Change from quarterly to monthly PAYE payments

If you have received the letter above from HMRC, you will need to make monthly payments of your PAYE if you haven’t already done so.  If you’re already making monthly PAYE payments you don’t need to make any changes.  HMRC carries out regular reviews to make sure that payments are being made at the correct frequency.

Employers who, over the course of a tax year, expect their average monthly PAYE payment will be less than £1,500 (less than £18,000 for the full tax year) can make PAYE payments quarterly.  If HMRC records show that your average PAYE payments have exceeded this limit you will no longer be able to make monthly payments. The total that HMRC uses to calculate this threshold includes Income Tax, National Insurance contributions, Student Loan deductions and Construction Industry Scheme (CIS) deductions.

Payment deadlines

If you pay electronically, your cleared payment must reach the HMRC bank account no later than the 22nd of the following month.  If you pay by post, your cheque must reach HMRC no later than the 19th of the following month.

As long as you pay your PAYE on time the only reference you need on your online payment is the Accounts Office Reference.  If you making payments early or late you will need to add extra numbers to the payment reference so HMRC know which period to apply it to.  HMRC has a calculator that lets you know what reference to use for payments outside the expected schedule.

For more information on how and when to pay, go to the HMRC website.

What to do if you have paid the wrong amount

If you have overpaid your PAYE, you will need to calcuate the overpayment.  Deduct this overpayment from the next monthly  / quarterly payment to HMRC.  It is almost impossible to get a refund of PAYE from HMRC.  The article here explains how to approach requesting a refund from HMRC.  HMRC uses the same bank account for Corporation Tax payments.  Make sure when you set up your payment that you don’t pay it with your Corporation Tax reference by mistake.  HMRC will not normally move any balances between PAYE / Corporation Tax  / VAT.

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